Absa Bank Kenya Plc, formerly Barclays Bank Kenya Limited has issued a profit warning saying its net profit for the 2020 full year is expected to decline significantly mainly triggered by the impact of coronavirus.
The listed bank said profit was also affected by the costs incurred by the recent rebranding from Barclays to Absa as well as increased impairment provisions due to the pandemic.
“Trends and forecasts show that the rate of impairment is increasing due to the delayed loans repayments and potential additional stress due to COVID-19 after-effects.” Absa company secretary notified its investors.
Absa becomes the latest Kenyan lender to issue a profit alert after Standard Chartered Bank Kenya, KCB Group, I&M Holdings, and HF Group. Most Kenyan banks have reported a significant drop in third-quarter financial results.
Latest data from Central Bank of Kenya (CBK) shows that commercial banks have now restructured loans totalling KSh 1.38 Trillion, which is 46.5% of the industry’s total loan book of KSh 2.9 Trillion.
Absa bank says it has restructured loans worth Ksh 62 Billion, equivalent to 30% of the bank’s net loans and advances to customers.
Absa Q3 Numbers
Absa Kenya’s net profit in the first nine months of 2020 fell by 65% to KSh 1.9 billion, from KSh5.6 billion reported in the same period in 2019. Loan loss provisions jumped to KSh7.6 billion from KSh3.1 billion reported in Q3 2019, a 146% increase.
Total non-performing loans rose by 30% to KSh14.3 billion at the end of September this year, from KSh11 billion in September 2019.
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