Absa Group has posted a 19.8% increase in net profit to KSh 14.8 billion in the 9 months to September from KSh 12.3 billion recorded in the same period in 2023.
- The growth was underpinned by a 16.5% increase in revenue to KSh 46.76 billion, helped by significant increases in both funded and non funded income.
- The growth was tempered by a faster surge in operating expenses which totalled KSh 25.7 billion in the period.
- Net interest income grew by 17.7% to KSh 34.5 billion on the back of a robust 28.4% increase in interest from loans while non-interest income shot up 13% to KSh 12.2 billion from digital finance, insurance, asset management and brokerage services.
“The bank continues to diversify its revenue sources through scalable payment solutions, improved customer experience and advanced financial inclusion through digital finance, affordable housing, and SME offerings like Wezesha and Microinsurance,” Absa noted in a statement.
The elevated interest rates regime pushed up gross non performing loans 23.5% to KSh 42.7 billion – however, the apex bank continues to nudge rates lower in an easing cycle that began in August. In response to the increased non performing loans, the lender edged up their loan loss provisions 18.7% to KSh 8.0 billion.
Customer loans and advances ended the quarter 5.9% lower at KSh 311.5 billion, while customer deposits decreased marginally by 0.7% to KSh 351.8 billion. The lender contracted its investments in government securities by 13.3% pointing to a cautious approach considering the heightened credit risk involved.
Absa showed operational improvement mirrored in the cost-to-income ratio, now at 37.8%. The bank has expanded its agency network to 3000 outlets from 600 offering continued financial solutions to empower small enterprises and women-led businesses.
The board of directors did not declare an interim dividend for the period. Absa is listed at the Nairobi bourse and closed the previous trading session at KSh 15.45, a year-to-date gain of 34.9%.
