- The bank recorded a 20 per cent growth in revenue to Sh40.2 billion
- Customer deposits grew by 26 per cent to Sh354 billion, supporting the loan book growth.
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Absa Bank Kenya Plc has reported net earnings of Sh12.3 billion for the nine months ended 30 September, a 15 per cent increase over the same period last year.
The lender has attributed this to double-digit revenue growth across core business segments.
The bank recorded a 20 per cent growth in revenue to Sh40.2 billion underscored by balance sheet momentum as it continued supporting individuals, businesses and corporate customers to play their rightful role in the country’s economic growth and development.
Loans and advances grew by 14 per cent to Sh331 billion driven by secured and general lending.
As a result, net interest income rose 26 per cent to close at Sh29.3 billion.
Customer deposits grew by 26 per cent to Sh354 billion, supporting the loan book growth.
Absa Bank Kenya managing director Abdi Mohamed said the lender's transformation and diversification agenda has resulted in the resilience of operations and created a diversified revenue pool.
According to him, 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 six per cent year-on-year to Sh10.8 billion.
“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,'' Mohamed said.
He said, the bank will continue to support all 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.
During the period, the bank continued to invest in solutions that are relevant to customers with the introduction of a Diaspora Banking proposition, and a revamped Digital Banking offering, among others.
Moreover, recognising the pivotal role of Small and Medium Enterprises (SMEs) in driving growth across various sectors, the bank reaffirmed its commitment to this sector with a Sh100 billion facility to be offered in the next three years.
"Our dedication remains steadfast in providing SMEs with comprehensive support, encompassing both financial and non-financial services, to navigate the challenging business landscape,” Mohamed said.
During the period, the bank's statutory operating expenses increased by 17 per cent as it continued to execute its transformational and people investments.
It has leveraged these investments to accelerate revenue growth which has led to a significant improvement in cost-to-income ratio to 38.7 per cent.
Impairment increased compared to the same period last year in line with the bank’s principles of prudence in risk management given balance sheet growth and tough operating environment.
Despite this increase, non-performing loans and a Loan Loss Ratio of 2.7 per cent remain within the bank’s risk appetite.
The lender's capital and liquidity ratios remain strong with sufficient headroom above the regulatory requirement.
Its total capital adequacy ratio closed at 17.7 per cent and liquidity reserve position at 29.8 per cent against the regulatory limits of 14.5 per cent and 20 per cent, respectively.