Absa Bank Kenya Resumes Dividend Payouts; Posts Ksh10.9 Bn Profit in FY21

Absa Bank Kenya has resumed modest shareholder payouts after a year-long hiatus due to the COVID-19 pandemic.

Absa Bank Kenya has resumed modest shareholder payouts after a year-long hiatus due to the COVID-19 pandemic it said Tuesday.

The resumption came after it posted a pre-tax profit of Ksh 15.55 billion in 2021 a 75.7 per cent jump compared with the corresponding year in 2020  attributed to the growth in net interest income, driven by the small and medium enterprises segment.

Absa Kenya Managing Director, Jeremy Awori, said the Bank’s strong performance is a reflection of customers’ resilience in a challenging environment and points to improving macro-economic conditions.

“We have drawn inspiration from the resilience of our customers and are committed to continue providing them with the financial solutions they need to pursue their growth ambitions,” said Awori.

“We remain optimistic of improving macro-economic conditions and our business remains well-positioned to help our customers manage through the coming quarters. Equally, our outlook on our business performance is positive and with the improved efficiency levels and returns, the bank aims to accelerate re-investments for growth in order to gain market share.”

Performance highlights

  • Total assets grew by 13% to Kshs.429 billion
  • Customer deposits grew by 6% to Kshs.269 billion
  • Total revenue up 7% to Kshs.36.9 billion
  • Impairment dropped by 48% to Kshs.4.7 billion
  • Profit after tax increased 161% to Kshs.10.9 billion

The lender resumed dividend payments after a pause in 2020 due to the COVID-19 pandemic. The Board has recommended a dividend pay-out of Kshs.6 billion for the year in review.

Analysts’ Views

“The attractive dividend pay-out should make the counter attractive in the coming days and lead to an uptick in the bank’s share price.  We, therefore, maintain a HOLD recommendation on Absa guided by our fair value estimate of Ksh 13.18 which represents an 8.5 per cent upside from yesterday’s closing share price of Ksh 2.15 (14th March 2022),” according to Sterling Capital.

On the other hand, Gengis Capital is opting for accumulation “We recommend accumulation of Absa on our expectation of an enhanced FY2021 dividend payout. Absa’s previous payouts had been held back by the significant rebranding costs as well as the Covid-19 pandemic.”

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Experience working on communication and marketing departments and in the broadcast industry. Interested in sustainable development and international relations issues.

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