Home Business Strong income powers ABSA Kenya H1 net profit to Ksh 8.3B

Strong income powers ABSA Kenya H1 net profit to Ksh 8.3B

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Absa Bank Kenya profit after tax has risen 32pc in the first six months of the year to Ksh 8.3 billion supported by strong performance across main income streams.

The bank’s profit margin for the period ended June 30, 2023 increased from Ksh 6.3 billion reported over the same period last year driven by net interest income which shot up 33pc to Ksh 19.2 billion from Ksh 14.4 billion and non-interest income which increased 26pc to Ksh 8.1 billion.

As a result the lender reported an increase in total operating income which rose to Ksh 27.4 billion from Ksh 20.9billion, a 32.5pc increase.

“In the face of a complex business environment, we are proud of the role we continue to play as an active force for good for our customers and the economy by ensuring continued access to finance, as evidenced by the growing balance sheet in the period under review,” said Abdi Mohamed, Absa Bank Kenya Managing Director.

Non-funded income in the period under review outpaced last year’s earnings aided by higher income from foreign exchange trading, fees and commissions, asset management, bancassurance and stock brokerage.

FX income for instance increased from Ksh 3 billion to Ksh 3.8 billion.

ABSA Bank Kenya also saw its total loan book rise to 317.9 billion from Ksh 261.5 billion reported last year with loans amounting to Ksh 20.2 billion being disbursed in the first six months of this year to June.

However, the bank reported a 74.4pc rise in funds set aside to cover potential loan losses, from Ksh 2.9 to Ksh 5.2 billion.

“Despite this increase, portfolio quality remains better than the industry. In addition, the Bank has provided adequate coverage ratio to ensure future credit losses are minimized and better managed,” said the bank.

ABSA Bank Kenya board has approved an interim dividend payment of 20 cents per share, equivalent to a total payout of Ksh 1.086 billion for the six-month period.