Absa Bank’s Q1 Profits After Tax Up By 24 Percent

Absa Bank Kenya PLC has reported a 24 percent increase in profit after tax to 2.4 billion shillings for the period ending 31 March 2021, compared to a similar period last year.

Despite the raging effects of the pandemic, all business units remained profitable and resilient, registering growth on key lines with all businesses registering growth year-on-year.

“In confronting the challenges posed by the COVID-19 pandemic, we have been greatly inspired by the ingenuity and undying determination espoused by our fellow Kenyans to rise above the storm and keep going,” said Jeremy Awori, Managing Director, Absa Bank Kenya.

Absa is currently enabling women businesses to access unsecured lending of up to 10 million shillings, payable for 5 years for existing borrowers, and 7 million shillings for new borrowers payable in 4 years and a grace period of 60 days to be granted on a case by case basis.

Total income grew by 2 percent to 8.8 billion shillings mainly driven by the growth of interest income, which was up 6 percent year on year on the back of increased lending. Well-managed costs were well maintained, dropping by 1 percent year on year.

Read More:

• Absa Bank Restructured Ksh 57 Billion Since Covid-19, Assets Up By 11%
• 22.04 Trillion Shillings Passed Through M-Pesa In 2020 Financial Year

Net Customer loans were up 8 percent to close at 218 billion shillings driven by key focus products namely General lending, trade loans, mortgage, and scheme loans that recorded strong growth year on year.

Interest income grew 6 percent from the prior year largely because of growth in the lending book; though partially offset by margin compression as a result of drops in Central Bank Rate (CBR) whose benefits the bank passed to customers as a responsible lender.

Customer deposits grew by 8 percent to 257 billion shillings with transactional accounts making up 66 percent of the total deposits.

Impairment increased by 25 percent compared to a similar period reflecting a tough macroeconomic environment for our business and our customers. The Bank’s average loan loss ratio increased to 2.6% (2.2% in March 2020).

Absa Bank Kenya Plc capital and liquidity ratios remain strong with sufficient headroom above the regulatory requirement; The Bank capital adequacy ratio is at 17.0% and liquidity reserve position at 38.3% against the regulatory limits of 14.5% and 20% respectively.