The bank also made strides in its sustainability agenda through the establishment of the Absa Kenya Foundation (AKF). The Foundation will focus on four key areas: enterprise development, education and skills, natural resource management, and health and humanitarian relief. This initiative is part of the bank’s broader commitment to positively impact communities and promote long-term sustainable development
Absa Bank Kenya has posted a solid financial performance for the third quarter of 2024, recording a profit after tax of Ksh 14.7 billion, marking a 20% increase compared to last year. The impressive growth reflects strong business performance across multiple segments, reinforcing the bank’s commitment to delivering consistent value to its customers.
Robust Growth Across Key Financial Metrics- The bank’s total loans and advances grew to Ksh 311 billion, with Ksh 94 billion in new lending directed towards critical sectors such as infrastructure, agriculture, and manufacturing. This continued focus on financing the growth of Kenya’s key industries underscores Absa’s role in supporting the country’s development.
Total revenue for the period increased by 16%, reaching Ksh 46.8 billion. This growth was driven by funded income, which amounted to Ksh 34.5 billion, and a 13% rise in non-funded income to Ksh 12.2 billion. Customer deposits also saw a slight increase, reaching Ksh 352 billion, reflecting sustained confidence in Absa as a trusted financial partner.
Strategic Focus on Innovation and Inclusion-Abdi Mohamed, the Managing Director and CEO of Absa Bank Kenya, attributed the bank’s strong performance to the disciplined execution of its strategic initiatives. “Our strategic objective remains firmly on track towards becoming a holistic, modern financial services provider, meeting the evolving needs of our customers through innovation and strategic partnerships,” Mohamed said.
In line with this vision, Absa continued to diversify its revenue streams and enhance customer experiences. The bank has been expanding its digital offerings, with a focus on financial inclusion through solutions like Wezesha, a platform designed to support small and medium-sized enterprises (SMEs), and Microinsurance products aimed at broadening access to affordable financial services.
During the review period, Absa expanded its service touchpoints significantly, growing its agent network from 600 to over 3,000 locations, further enhancing its accessibility across Kenya.
Empowering Communities and Small Businesses-Absa remains committed to empowering small businesses and women-led enterprises, with a focus on providing both financial and non-financial solutions. The bank has positively impacted over 14,000 entrepreneurs, helping them navigate the current economic landscape. It also enhanced its Sharia-compliant financial services through its La-Riba offering, while continuing to develop its Wezesha Stock platform for SMEs.
Additionally, Absa accelerated its ongoing Ksh 3 billion technology upgrade strategy, aimed at strengthening its core banking infrastructure and back-office systems, to ensure seamless service delivery to its growing customer base.
Sustainability and Community Impact-Absa also made strides in its sustainability agenda through the establishment of the Absa Kenya Foundation (AKF). The Foundation will focus on four key areas: enterprise development, education and skills, natural resource management, and health and humanitarian relief. This initiative is part of the bank’s broader commitment to positively impact communities and promote long-term sustainable development.
Managing Costs and Maintaining Strong Financial Health-While the bank’s strategic investments in technology and expansion resulted in a 13.7% increase in operating costs to Ksh 17.7 billion, Absa improved its cost-to-income ratio to 37.8%, reflecting efficient management of resources. The return on equity (ROE) also rose to a commendable 25.4%, demonstrating the bank’s ability to generate value for shareholders.
Impairment charges increased by 19% to Ksh 8.0 billion, in line with balance sheet growth and a challenging operating environment. However, Absa emphasized that it continues to maintain a healthy portfolio quality and a strong coverage ratio to manage potential future credit losses.
The bank’s capital and liquidity ratios remain robust, with a total capital adequacy ratio of 19.4% and a liquidity reserve position of 38.1%, both comfortably above regulatory requirements.
Looking Ahead: Confidence in Continued Growth-Mr. Mohamed concluded, “This strong outcome demonstrates the effectiveness of the Bank’s growth strategy and its dedication to providing both financial and non-financial solutions that address the diverse needs of individuals, businesses, and communities. As we look ahead, we are confident that with prudent management, we can leverage these opportunities and continue to support our customers and stakeholders’ ambitions, consequently driving our growth.”
With a solid foundation, strategic focus, and a commitment to innovation and sustainability, Absa Bank Kenya is poised for continued success in the coming quarters, further cementing its position as one of the country’s leading financial institutions.
