Absa Bank’s profit after tax for the first nine months of 2020 declined by 51 percent to KSh3 billion compared to the same time last year excluding KSh1.9 billion to the lenders’ transition from Barclays.
Absa attributed the decline in performance to increased provision for bad debts which surged by 147 percent to KSh7.6 billion to cushion for defaults from the effects of the Covid-19 pandemic.
“Performance was significantly impacted by 147 percent growth in impairment as customers struggled to keep up with loan repayments due to the economic effects of the Covid-19 pandemic, and a decisive action by the management to increase provisions in order to best position for future potential credit losses,” Absa said in the statement.
Absa restructured loans totaling over KSh62 billion equivalent to 30 percent of the loan portfolio.
Customer deposits grew by five percent to KSh247 billion.
Total revenues rose by three percent to KSh25.4 billion driven by the growth of non-interest income, which rose four percent year on year.