Absa Bank Kenya PLC has recorded a profit after tax of Kshs10.7 billion for the half year ended June 30, 2024.

In a press release on August 26, the Bank said the figure is an increase of 29% from the profit recorded over the same period last year, supported by strong revenue growth across all business segments.

The Bank continued to empower its customers’ aspirations through access to finance as well as non-financial support in the six months.

Loans and advances closed at Ksh316.3 billion, with the Bank booking Ksh64 billion in new gross lending to critical sectors of the economy.

Total revenues rose 16% to stand at Ksh31.8 billion, underpinned by growth in funded income at Ksh23 billion during this period.

Additionally, non-funded income grew by 8.4% while customer deposits increased by 6% to Ksh353.3 billion.

Speaking while releasing the results, Absa Bank Kenya PLC Managing Director and CEO, Abdi Mohamed, said the improved financial performance reflects prudence in strategy execution and the resilience of the Bank’s customers.

“This commendable outcome, realized amidst a challenging macro-economic environment, underscores the efficacy of the Bank’s growth strategy and its unwavering dedication to providing relevant financial solutions that address the diverse needs of individuals, enterprises, and communities because we want to continue being a critical enabler to their growth stories,” Mohamed said.

Absa Lists Other Achievements

The Bank took deliberate actions to support its customers, restructuring approximately Ksh1.4 billion in loans for retail consumers impacted by tough economic times.

At the same time, Absa enhanced the provision of non-financial skills towards supporting the growth ambitions of MSMEs and Women in Business, impacting more than 14,000 entrepreneurs in the period.

Notably, the lender relaunched its La-Riba to offer more innovative Shariah-compliant solutions and strengthened its Wezesha Stock platform for SMEs to enhance customer value and experience.

Besides, it intensified infrastructure upgrades to buttress its core banking and back-office systems with Ksh3 billion worth of technology investments earmarked for 2024.

Environmental Conservation & CSR

During the period, the Bank intensified its sustainability efforts, expanding Environmental, Social, and Governance (ESG)-linked lending by advancing Ksh16 billion in sustainable finance, including climate finance.

An additional Ksh12 billion was provided to start-ups and youth through the Timiza platform.

From a community perspective, the Bank impacted over 5,000 students through the Ready to Work program and established 67 computer labs in schools nationwide, benefiting over 100,000 learners.

“In line with our strategic ambitions, we are committed to becoming a sustainable financial services company that addresses the evolving needs of a modern-day consumer through innovation and strong partnerships,” Mohamed added.

“Our focus is on diversifying revenue streams with scalable payment solutions, enhancing customer experience, and advancing financial inclusion through digital finance, digital savings, affordable housing, and SME offerings like Wezesha and Microinsurance.”

Efficiency & Impairment

The Bank’s statutory operating expenses increased by 12% as it continued to execute its transformational and people investments.

Absa has leveraged these investments to accelerate revenue growth leading to a significant improvement in cost to income ratio to 35.8% from 37% compared to the same period 2023.

Impairment marginally increased to Ksh5.2 billion compared to the same period last and its portfolio quality remains better than the industry.

In addition, the Bank has ensured an adequate coverage ratio, which is also better than the industry levels, to ensure future credit losses are minimized and better managed.

Capital & Liquidity

The Bank’s total capital adequacy ratio closed the quarter at 18.6% and liquidity reserve position at 35.2% against the regulatory limits of 14.5% and 20%, respectively.

“As we look to the future, we are mindful of the macroeconomic challenges ahead. However, we are well positioned for growth, leveraging our strategic prudence, enhanced digital capabilities, and the dedication of our staff to support our customers and stakeholders,” Mohamed stated.

“We remain committed to driving meaningful transformation in our communities and making a greater contribution towards economic progress in the country.”