Absa Bank Kenya bags Sh7.5b in full-year net profit
Zachary Ochuodho @zachuodho
Absa Bank Kenya has recorded a net profit of Sh7.45 billion for the period ended December 31, 2019 compared to Sh7.41 billion reported during a similar period previously.
The bank’s Managing Director, Jeremy Awori, said the performance excludes exceptional item of Sh1.5 billion, which relates to costs incurred in the rebranding exercise into Absa.
Awori said the performance is mainly attributable to a 7 per cent growth in total income, 1 per cent growth in operating costs partially offset by a 9 per cent growth in impairment.
“The total assets grew by 15 per cent year-on-year driven by growth in customer loans, government securities as well as other liquid assets,” he said in statement.
He said the net customer loans were up 10 per cent to close at Sh195 billion driven by key focus products namely; general lending, asset finance, mortgage and scheme loans that recorded strong growth year on year.
During the period the bank’s customer deposits grew by 15 per cent to Sh238 billion with transactional accounts making up 70 per cent of the total deposits.
“The total income increased by seven per cent to Sh33.8 billion driven mainly by the growth of non-interest income, which was up by nine per cent year on year,” Awori said.
He said the main areas of growth were risk fees, fixed income trading and risk-managed products.
Interest income grew by five per cent from the previous year largely because of growth in the lending book; though partially offset by the margin compression as a result of drop in Central Bank Reference rate.
According to the bank’s financial statement, costs were well managed at Sh17.3 billion reflecting a one per cent increase year on year largely because of spending discipline and cost saves initiatives.
The cost saves initiatives included automation of the processing centres, investment in alternative channels and branch rationalisation programmes.
The savings derived were used to fund sustainable investments, especially in automation and digitisation.
Awori said since the brand transition journey was completed in February, the bank has delivered 100 per cent on separation projects including successful migration of all technology systems.
“What has been really exciting about our transition is that we are building on a strong foundation, a rich legacy that spans over a century. As we look into the future, we are excited about the opportunities as well as the challenges,” Awori he added.
Awori said the current challenges present the bank with opportunities to innovate, create and continue adding value to its communities.