Absa Bank Kenya has announced a net profit of Kshs.16.4 billion for the full year 2023. This is a 12% rise as compared to a similar period last year.
This rise in profitability was on the back of 19% rise in revenue to Kshs.54.6 billion driven by growing customer assets as well as faster growth of new business lines such as bancassurance, asset management, and digital finance. Interest income increased by 24% to Kshs.40 billion, while non-funded income grew by 6% to Kshs.14.5 billion despite a challenging macros environment.
On the other hand, operating expenses increased by 16% to Ksh. 21 Billion. This was largely due to a 12% rise in staffing cost to Ksh. 11.7 Billion as well as various investments. The Bank was able to leverage on these investments to accelerate revenue growth which has led to a significant improvement in cost to income ratio to 39.7%.
During the period, customer loans and advances increased by 18% to Kshs.336 billion as the Bank focused on supporting key economic sectors such as energy, telecommunications, manufacturing, trade, commercial property and affordable housing. Customer deposits increased by 19% to Kshs.363 billion. Total assets ended the year at Kshs.520 billion, up from Kshs.477 billion the year before, representing a 9% increase.
Impairment increased by 43% compared to the same period last year in line with principles of prudence in risk management given balance sheet growth and tough operating environment.
The Bank’s capital and liquidity ratios remain strong with sufficient headroom above the regulatory requirement. The Bank’s total capital adequacy ratio closed at 18.1% and liquidity reserve position at 31.1% against the regulatory limits of 14.5% and 20%, respectively.
The bank launched various propositions in the period which include diaspora banking proposition, a digital savings proposition, Buy Now Pay Later solution and term loans on Timiza. Furthermore, in pursuit of its ambition to become the leading bank for SMEs the Bank continued to enhance its transactional capabilities for businesses with solutions such as MobiTap -a first-to-market mobile payment solution- as well as the Wezesha Stock digital platform which enables retailers and distributors to expediently obtain financing.
Abdi Mohamed, Absa Bank Kenya PLC Managing Director and CEO said: “This impressive performance truly reflects the growth and resilience of our customers who have continued to give us a chance to contribute to their growth story as their financial partner. It is also a demonstration that our strategy is effective in creating value for all our stakeholders while delivering long-term growth in a dynamic operating environment. With 2023 being the first year of implementation of our five-year strategy, this performance gives us a strong launch pad from which we will execute our set priorities.”
The Board has proposed to shareholders a final total dividend payout of Kshs.7.3 billion, translating to Kshs. 1.35 per ordinary share. Taken together with the interim dividend of Shs 0.20 per share paid in October 2023, the total dividend for the year amounts to Shs 8.42 billion, representing a 14.8% increase compared to the preceding year.