Absa Bank’s Profits Spike To Hit Ksh 4.5 Billion In Q1
Absa Bank Kenya PLC has today reported a Profit after Tax of Kshs.4.5 billion for the quarter ended 31 March…
Absa Bank Kenya PLC has today reported a Profit after Tax of Kshs.4.5 billion for the quarter ended 31 March 2023, representing a 51% growth in comparison to a similar period last year.
The impressive results were supported by significant balance sheet growth, with the Bank’s total assets crossing the half-trillion mark, rising by 17% to reach Kshs.515 billion.
For the period, loans and advances increased by 28% to Kshs.310 billion with the majority of this lending advanced to sectors driving economic growth and transformation, particularly Small and Medium Enterprises (SMEs).
Customer deposits increased by 15% to Kshs.311 billion, supporting further balance sheet expansion. This performance underlines the critical role the Bank continues to play as a key partner for growth for its customers and the broader economy.
For the period, the Bank’s revenue increased by 40% to KShs. 13.9 billion, with net interest income increasing by 36% to Kshs.9.4 billion. The Bank’s diversification and multi-year transformative investments are yielding the desired results, with non-funded income growing by 49% to Kshs.4.5 billion.
Additionally, new businesses have continued to diversify the Bank’s revenue, with Absa Asset Management recording a 207% revenue increase, Stock brokerage revenue increasing by 64%, and Bancassurance revenue increasing by 42% year on year.
Having commenced the execution of its new strategic horizon in the quarter under review, Absa Bank Kenya PLC Managing Director, Abdi Mohamed, said: “We are pleased with this impressive financial performance which was delivered against a challenging business environment. It is a demonstration of the resilience of our business and serves as a good indication that our new strategy focused on building a bigger, better, and more inclusive financial institution that consistently meets the needs of its customers and creates shared value for all of its stakeholders is working.”
Among the strategic milestones achieved in the period was the enhancement of the digital onboarding platform with a more rewarding savings account. In addition, in keeping with the government’s commitment to providing affordable housing, the Bank enhanced its mortgage offering to include 100% financing with a 25-year repayment period. Further, the Bank continued to provide its SME customers with access to both financial and non-financial support through the Wezesha Biashara drive to help them navigate a difficult business environment.
The Bank also redesigned its agri-business proposition to play a larger role in the country’s agricultural sector transformation. The period further resulted in the revamp of the Bank’s Islamic banking proposition as well as the relaunch of its China Desk to support the growing China-Africa trade.
The Bank’s statutory operating expenses increased by 14% as we continued to execute our transformational and people investments. The Bank has leveraged these investments to accelerate revenue growth which has led to a significant improvement in cost to income ratio to 36% from 45% compared to the same period last year.