Absa Bank shareholders are in for big pay after the bank closed the year with a profit after tax of Ksh 16.4 billion for the year to December 31, 2023.
The net profit growth of 12pc from Ksh 14.6 billion the bank registered a year earlier stems from increased income of 19pc to Ksh 54.6 billon from Ksh 46 billion.
The bank reported a 24pc rise in net interest income from Ksh 32.3 billion to Ksh 40 billion on account of increased loan uptake by customers during the period under review.
Non-interest income on the other hand rose from Ksh 13.7 billion to Ksh 14.5 billon.
“This impressive performance truly reflects the growth and resilience of our customers who have continued to give us a chance to contribute to their growth story as their financial partner. It is also a demonstration that our strategy is effective in creating value for all our stakeholders while delivering long-term growth in a dynamic operating environment,” said Abdi Mohamed, Absa Bank Kenya Plc Chief Executive Officer.
Interest earnings from loans and advances during the period increased from Ksh 30.7 billion to Ksh 44.3 billion on increased lending to customers from Ksh 283.6 billon to Ksh 335.7 billion.
During the period under review, the bank reported a 42.6pc increase in loan loss provision from Ksh 6.5 billon to Ksh 9.2 billion as gross non-performing loans surged 56.5pc to Ksh 35.3 billion from Ksh 22.5 billion.
“Absa has ensured an adequate coverage ratio which is also better than the industry levels to ensure future credit losses are minimized and better managed,” the bank stated.
Customer deposits increasing 19pc to Ksh 363 billion while total assets ended the year at Ksh 520 billion, up from Ksh 477 billion reported in 2022, representing a 9pc increase.
“Absa is well positioned for growth. With our robust balance sheet and a strong capital position, we will continue to invest in relevant initiatives that empower our customers and stakeholders to pursue and achieve their aspirations, while adeptly navigating external challenges,” added Mohamed.
Absa Bank shareholders are also set to pocket a total dividend payout amounting to Ksh 8.42 billion after the Board proposed a final total dividend payout of Ksh 7.3 billion, translating to Ksh 1.35 per ordinary share which adds to the interim dividend of Ksh 0.20 per share paid in October 2023.
By Ronald Owili