Absa Bank Kenya reported a net profit of Sh12.3 billion for the first nine months of 2023, a 14.8% increase from the same period in 2022.
The main driver of this growth was the higher interest income from loans and advances to customers, which rose by 269.7% to Sh39.1 billion.
The bank’s loan book expanded by 270.1% to Sh330.9 billion, reflecting its focus on lending to the private sector.
The bank also benefited from the rising interest rates in the market, which enabled it to charge higher base lending rates than in the previous year.
The bank’s return on equity improved to 25.2%, up from 23.6% in 2022.
The bank’s non-interest income, which includes fees, commissions, and trading income, grew by 6% to Sh10.8 billion.
“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 percent year-on-year to Sh10.8 billion,” said the lender.
The bank’s total operating income, which is the sum of interest and non-interest income, increased by 20% to Sh40.1 billion.
The bank’s operating expenses, which include staff costs, loan loss provisions, and other administrative expenses, increased by 21.8% to Sh22.3 billion.
The main drivers of this increase were the higher loan loss provisions, which rose by 34.4% to Sh6.76 billion, and the staff costs, which rose by 16.2% to Sh8.6 billion.
Absa Bank Kenya’s holdings of government securities held for trading decreased by 39.3% to Sh28.9 billion, while its holdings of government securities held to maturity decreased by 16.8% to Sh76.6 billion.
| Balance Sheet Items (Kshs bn) | Q3’2022 | Q3’2023 | y/y change |
| Government Securities | 92.2 | 77.7 | (15.7%) |
| Net Loans and Advances | 289.4 | 330.9 | 14.3% |
| Total Assets | 481.3 | 504.9 | 4.9% |
| Customer Deposits | 281.1 | 354.3 | 26.1% |
| Deposits per branch | 3.3 | 4.2 | 24.6% |
| Total Liabilities | 421.1 | 439.6 | 4.4% |
| Shareholder’s Funds | 60.3 | 65.3 | 8.4% |
| Income Statement (Kshs bn) | Q3’2022 | Q3’2023 | y/y change |
| Net Interest Income | 23.3 | 29.3 | 26.0% |
| Net non-Interest Income | 10.2 | 10.8 | 6.4% |
| Total Operating income | 33.4 | 40.2 | 20.0% |
| Loan Loss Provision | (5.0) | (6.8) | 34.3% |
| Total Operating expenses | (18.3) | (22.3) | 21.9% |
| Profit before tax | 15.1 | 17.8 | 17.8% |
| Profit after tax | 10.7 | 12.3 | 14.9% |
| Core EPS (Kshs) | 2.0 | 2.3 | 14.9% |
The bank announced a Sh100 billion financing commitment for micro, small, and medium-sized enterprises (MSMEs) over the next three years. The bank said it aims to support the development of the MSME sector across various value chains.
The lender also introduced the Wezesha Stock digital platform, which allows its SME clients to order new supplies from manufacturers and suppliers via the app, while the bank pays them directly.
The bank said this platform provides its SME clients with access to both financial and non-financial services.
