Absa Kenya net profit hits Sh5.6b
Absa Kenya net profit for the first half of 2021 surged almost tenfold to Sh5.6 billion from Sh589 million posted same time last year on increased income.
The bank’s half-year performance similar period last year declined due to transition costs amounting to Sh1.6 billion as the firm lender rebranded from Barclays to Absa as it migrated to new systems.
Other than rebranding costs, the bank also benefitted from deferred taxes worth Sh637.3 million, which boosted the bottom-line during the period under review.
Total income grew by six per cent to Sh17.8 billion mainly driven by the growth of net interest income.
The lender says non-funded income grew by 6 per cent driven by new innovations and digitization.
Speaking on the performance, Absa Kenya Managing Director, Jeremy Awori, attributed said improving macro-economic environment, quality of credit and resilience in customer operations boosted the lender’s bottom line.
“In confronting the challenges posed by the pandemic, we made the right decisive actions in capital management and supporting customers with over Sh62 billion loan restructures and Sh103 billion in gross lending in 2020.
These decisions are paying off in 2021 with stronger balance sheet and faster growth for our franchise,” he said.
The bank witnessed growth in interest income particularly in the small and medium enterprises segment.
Loan loss provisions dropped 63.9 per cent to Sh1.9 billion despite gross non-performing loans increasing 7.8 percent to Sh18.3 billion.
Customer deposits increased 6.1 per cent to Sh263.9 billion while the company’s loan book expanded 8.3 per cent to Sh218.8 billion.
Absa Kenya’s costs stood at Sh8 billion reflecting a 3 per cent reduction year on year largely attributed to spending discipline and cost initiatives.
The cost saving initiatives instituted by the bank include automation of the processing centre and continued migration of customer transactions to alternative channels.
The bank recently introduced WhatsApp banking as part of its commitment to invest over Sh1.6 billion in technology and innovation this year aiming to enhance customer experience.
Customers can now transact via WhatsApp including making account-to-Mpesa and Airtel Money transfers, inter-account transfers, bill payments and balance enquiry, among others.