Absa Bank Records Ksh8.2 Billion Profit After Tax In Q3

Absa Bank Kenya PLC has reported a growth in profit after tax to Ksh8.2 billion for the period ending 30 September 2021 compared to a similar period last year.

Growth in interest income, notably in the small and medium enterprise segment, drove the bank’s solid performance as it stepped up its efforts to help these businesses recover from the effects of Covid-19 and reposition for growth.

While announcing the results, Absa Bank Kenya Managing Director Jeremy Awori attributed the bank’s performance to the strengthening macro-economic environment, quality of credit and resilience in customer operations.

Despite the negative economic effects of Covid-19, all business units remained profitable, registering growth on key lines. Total income increased by 7% to Ksh27.3 billion, primarily due to higher interest income, which increased by 9% year on year due to increased lending. This was however partially offset by margin compression as a result of drops in Central Bank Rate (CBR) whose benefits the bank passed to customers. Non-funded income grew by 5% as a result of our new innovations and digitization, while costs fell by 3% year over year.

Net customer loans increased by 9% to Ksh229 billion, owing to robust year-on-year growth in key core products such as general lending, trade loans, mortgages, and scheme loans. Customer deposits increased by 9% to Ksh269 billion, with transactional accounts accounting for 69% of the total deposit book.

“The pandemic and its negative effects continue to persist, but we have drawn inspiration from our customers to rise above the storm and continue working together to keep the wheels of our economy turning. We are optimistic that we shall make good our commitment to continue innovating and enhancing our customers’ banking experience,” Mr Awori added.

The bank’s costs stood at Ksh12 billion, down 3% year on year due to spend discipline and cost initiatives, which built on previous periods of underlying cost savings. Automation of the processing center and continuing movement of consumer transactions to alternative channels were among the cost-cutting strategies. The savings were used towards long-term investments, particularly in automation and digitization. The firm’s efficiency ratio improved to 44 % of in Q3 2021, down from 49% in the third quarter of 2020.

Impairment decreased by 55% compared to similar period last year reflecting an improving macroeconomic environment for our business and customers. The bank’s average loan loss ratio reduced to 2.0% (4.9% in Q3 2020).

The lender upgraded its Timiza App making it more interactive and significantly reducing the customer journey and consequently, transaction time. Absa also introduced a goal-based saving feature where customers can set their saving target at a certain amount and track their progress.

“As part of our ongoing commitment to innovation, we have added a new feature to our internet and mobile banking platforms that allows customers to view and manage their frequently used debit card functionalities online. These include temporary card freezing and unfreezing, card replacement, PIN setting and resetting, and card withdrawal limit management,” said the lender in a statement.

Absa also announced it is capitalising on collaborations especially in Agency Banking, where it has teamed up with Postbank and Kenswitch to help deliver Agency Banking and ATMs, respectively.

The bank recently concluded a historic Ksh11 billion medium-term note to EABL.

The bank’s total capital adequacy ratio closed the third quarter of 2021 at 17.3% and liquidity reserve position at 39.7% against the regulatory limits of 14.5% and 20% respectively.

“We have been working hard alongside our clients in preparation for a world beyond the pandemic and a more stable economic environment. Our business remains very well positioned to help our customers reposition for recovery. Our capital and liquidity levels are solid to navigate the coming quarters and we are seeing opportunities for growth in our balance sheet with recovery in revenue growth and profits expected. We are confident, at this point in time, to resume payment of dividend at the full year 2021,” said the lender.

Read: Absa Bank Finances Ksh1.2Bn Vehicle Leasing Deal For National Police Service

>>> Absa Group Appoints Sello Moloko As Chairman-designate

Latest

Whipped and Stripped! A Survivor’s Tale of Harrowing Brutality in a Mental Hospital

The lack of a long-term vision and inadequate resourcing of mental hospital infrastructures continues to take a toll on Kenya’s mentally ill patients.

Dubai Agency Picks Top Influencer Marketers to Lead Kenyan Operation

This strategic move is in line with indaHash vision to cement its presence in Africa, following its impactful footprint in South Africa since 2017 and successful collaborations with clients like the South African Tourism Board.

SportPesa to reward Customers in Cash-Filled Festive Promotion

Running from December 4th to 25th, the SportPesa campaign promises daily excitement with six lucky winners expected to walk away with Ksh5,000 daily.

Captain William Ruto: President’s Namesake With a Decorated Career

Captain William Kipkemboi Ruto is officially known by the name William Ruto, which also happens to be President William Samoei Ruto’s official name.

Follow Us

Newsletter

Don't miss

Tusker Oktobafest Rolls East African Cultures into One

From regional events across Kenya to inaugural gatherings in Uganda and Tanzania, and the Tusker Oktobafest grand finale in Nairobi, the festival harmonized traditions, celebrated diversity, and highlighted the rich cultural tapestry of the East African culture

Lupita’s Little Brother Junior Nyong’o Charting His Own Path in Acting

Junior Nyongó, who is also a musician and a DJ and now a graduate of UC San Diego with an MFA in Acting, is crafting his own solid path in the world of acting with roles in major theatre productions.

Safaricom To Power Tusker OktobaFest Beer Festival

Safaricom’s involvement in OktobaFest as a technology and payments partner will focus on fostering seamless in-festival connectivity, empowering the youth and Gen Z community through Safaricom Hook, and powering digital payments through M-PESA.

Music Producers Launch Organization To Streamline Recording Industry

Recording Industry of Kenya (RIKE) was launched on 9th October 2023. Registered in 2022 as a not-for-profit organization, RIKE aims to promote the collective interests of producers of sound recordings in the country.

Nairobi’s Hero Bar Listed Among World’s 50 Best Bars

World Best Bars: Hero Bar in Nairobi continues to climb the list, moving up six places to No.62 and Johannesburg’s Sin + Tax comes in at No.94. Dubai new entry Ergo is at No.69 and Melbourne’s Byrdi has re-entered the list at No.61.

Kenyan DJs Face Off In Smirnoff Battle Of The Beats Season 3

The Smirnoff Battle of the Beats Season 3, a DJ competition, is poised to unleash an unprecedented musical frenzy countrywide.

The Highs And Lows Of Betty Kyallo, Sisters Show As Season 2 Ends

Kyallo Kulture has always been, above all, about sisterhood, and in Season 2 we have witnessed the charm of it - the ups that gave us wholesome moments as the sisters led by Betty Kyallo spent time together.

DStv Beats CNN, BBC To Become Most Admired Media Outlet In Africa

DStv, MultiChoice Group’s leading broadcast service, has been named...

MultiChoice Revises Subscription Fees For DStv, GOtv

MultiChoice has announced price adjustments on some of their...

Octopizzo: How I Make My Money

"I've been doing this for 12, 13 years. It reaches a point where you no longer need to prove that you can make a hit record," he stated.
FRANCIS MUTINDA
FRANCIS MUTINDAhttp://www.businesstoday.co.ke
FRANCIS MUTINDA is a content creator and editor with Business Today. Email: [email protected]

Whipped and Stripped! A Survivor’s Tale of Harrowing Brutality in a Mental Hospital

The lack of a long-term vision and inadequate resourcing of mental hospital infrastructures continues to take a toll on Kenya’s mentally ill patients.

Dubai Agency Picks Top Influencer Marketers to Lead Kenyan Operation

This strategic move is in line with indaHash vision to cement its presence in Africa, following its impactful footprint in South Africa since 2017 and successful collaborations with clients like the South African Tourism Board.

SportPesa to reward Customers in Cash-Filled Festive Promotion

Running from December 4th to 25th, the SportPesa campaign promises daily excitement with six lucky winners expected to walk away with Ksh5,000 daily.

LEAVE A REPLY

Please enter your comment!
Please enter your name here