Absa Kenya posts 24% net growth in Q1

 

Absa Bank Kenya Plc has reported a 24 per cent increase in profit after tax to Sh2.4 billion for the period ending March 31 compared to a similar period last year.

This resilient performance was mainly driven by growth in interest income particularly in the small and medium enterprises segment as the bank continued to support businesses to recover from the impact of Covid-19.

Speaking after releasing the results, Absa Kenya MD Jeremy Awori said despite the raging effects of the pandemic, all business units remained profitable and resilient, registering growth on key lines with all businesses registering growth year-on-year.

Total income grew by two per cent to Sh8.8 billion mainly driven by the growth of interest income, which was up six per cent year on year on the back of increased lending. Well managed costs were well maintained, dropping by a percentage point year on year.

Net Customer loans was up eight to close at Sh218 billion driven by key focus products namely general lending, trade loans, mortgage and scheme loans that recorded strong growth year on year.

Interest income grew six per cent from prior year largely because of growth in the lending book; though partially offset by margin compression as a result of drops in Central Bank Rate (CBR) whose benefits the bank passed to customers as a responsible lender.

Customer deposits grew by eight to Sh257 billion with transactional accounts making up 66 per of the total deposits

The Bank costs were well managed at Sh4 billion reflecting a one per cent reduction year on year largely because of spend discipline and cost saves initiatives.

The cost saves initiatives included automation of the processing centre and continued migration of customer transactions to alternative channels. The savings derived were used to fund sustainable investments especially in automation and digitization.

The firm’s efficiency ratio for the first quarter of 2021 improved to 46 per cent.

Impairment increased by 25%l per cent compared to similar period reflecting tough macroeconomic environment for our business and our customers.

The Bank’s average loan loss ratio increased to 2.6 per cent (2.2 per centin March 2020).

Absa Bank Kenya capital and liquidity ratios remain strong with sufficient headroom above the regulatory requirement.

The bank's capital adequacy ratio is at 17 per cent and liquidity reserve position at 38.3 per cent against the regulatory limits of 14.5 per cent and 20 per cent respectively.

''We have been working alongside our clients in preparation for a world beyond the pandemic and a more stable economic environment,'' Awori said.

He added that the businesses remains well positioned to help clients reposition for the anticipated economic recovery going into the second half of 2021.

''Our capital and liquidity levels are solid to navigate the coming quarters and we see opportunities for growth in our balance sheet with recovery in revenue growth and profits expected in 2021,'' he said.   BY THE STAR