Absa Bank has reported a Kshs.12.3 billion net profit for the nine months ended 30 September 2023. This represents a 15% increase from Ksh. 10.7 billion realized over the same period last year.
The rise in profitability was on the back of a 20% growth in revenue to Kshs.40.2 billion. During the period, Loans and advances grew by 14% to Kshs.331 billion driven by secured and general lending. As a result, net interest income rose 26% to close at Kshs.29.3 billion. New business lines such as Asset Management, Digital Finance, Bancassurance and stock brokerage delivered double-digit growth, positively contributing to the strong performance. As such, non-interest income grew by 6% year-on-year to Kshs.10.8 billion. Customer deposits grew by 26% to Kshs.354 billion, thereby supporting the loan book growth.
On the other hand, Absa’s operating expenses grew 21.8 percent from Sh18.3 billion to Sh22.3 billion during the period. This was attributed to higher loan loss provision from Sh5.03 billion to Sh6.76 billion and staff costs, which rose to Sh8.6 billion from Sh7.4 billion.
Absa also reduced its holdings of government securities held for trading to Sh28.9 billion from Sh47.6 billion. It also cut its portfolio of securities held to maturity from Sh92.1 billion to Sh76.6 billion.
Absa Bank Kenya PLC Managing Director Abdi Mohamed, said, “We are inspired by the positive progress we are making in the execution of our strategy focused on building a modern-day consumer financial services business, becoming a market leader in business banking while building a leading corporate and investment bank that is committed to connecting client ecosystems. As such, we continue to support all our customer segments with the right financial and non-financial support to achieve their ambitions in the right way and these results are a clear demonstration of that commitment.”
For the period, the Bank continued to invest in solutions that are relevant to customers with the introduction of a Diaspora Banking proposition, a revamped Digital Banking offering, among others. Also, while recognizing the pivotal role of Small and Medium Enterprises (SMEs) in driving growth across various sectors, the Bank reaffirmed its commitment to this sector by allocating a Kshs.100 billion fund for SMEs over the next three years. This initiative aims to support businesses across diverse value chains. The bank also launched the Wezesha Stock digital platform, which facilitates financing for retailers and distributors.