BUSINESS MARKETS

Absa Kenya Records Ksh10.9B Profit in Massive 161% Jump

MARTIN SIELEMar 15, 2022862

Absa Bank Kenya CEO Jeremy Awori at a past event. The bank significantly reduced its operating expenses in 2021. [Photo/ Kenya Insights]

In a busy week for listed banks as they announce their full year 2021 results, Absa Kenya continued the prevailing trend as it reported a massive 161% increase in profit after tax on Tuesday, March 15.

The group saw profit after tax rise from Ksh4.16 Billion in 2020 to Ksh10.86 Billion in 2021.

Banks including Standard Chartered and Absa have so far reported significantly higher profits for 2021, driven by lower costs and reduced credit impairment provisions as they recover from the continued impact of Covid-19 on the economy.

Absa saw its total operating expenses slide to Ksh21.37 Billion in 2021 from Ksh25.67B the previous year.

“The efficiency efforts paid off with operating expenses reducing and has resulted in a cost to income ratio of 45%,” the bank noted while referencing efforts to lower expenses by shifting customers to new transaction channels.

The bank noted that over 90% of all transactions were being undertaken on alternate channels.

Interest income increased marginally from Ksh31.44B to Ksh32.03B in 2021. Non-interest income also rose to hit Ksh11.66B up from Ksh11.14B the previous year.

Total operating income increased 7% to hit Ksh36.92B.

Absa also announced a return to dividend payments citing the recovery of return on equity to 19%. The board recommended a dividend per share payment of Ksh1.1, the same level as in 2019.

It is scheduled to hold a virtual AGM on May 26, 2022.

Expressing a positive outlook for the future, it emphasized its commitment to capacity building for SMEs.

“We remain optimistic of improving macro-economic conditions and our business remains well-positioned to help our customers manage through the coming quarters. Equally, our outlook on our business performance is positive and with the improved efficiency levels and returns, the bank aims to accelerate re-investments for growth in order to gain market share,” Absa noted in a statement.