Absa Bank Kenya PLC has today reported a Profit after Tax of Kshs.3billion for the quarter ending 31 March 2022, a growth of 22% compared to a similar period last year.
The Bank reported that all its business units remained profitable, registering growth on key lines in the period. Total income grew by 12% to Kshs.9.9 billion, primarily driven by higher net interest income which went up by 15% year on year, as a result of increased lending. Non-funded income grew by 6% driven by innovations and continued digitization.
Announcing the results, Absa Bank Kenya Managing Director, Jeremy Awori, said the Bank’s strong performance reflects customers’ resilience in a challenging environment and points to improving macroeconomic conditions compared to the same period last year, as well as the successful execution of its five-year strategy which is focused on driving Growth, Transformation, and Returns.
“The year has started with great momentum and we are encouraged by this performance which is a reflection of the tenacity, determination, and resilience of our customers across our different business segments. Our business is on a growth trajectory and well-positioned to continue playing its rightful role in driving economic recovery from the slowdown experienced in the last two years,” Mr. Awori said.
For the period, total assets increased by 14% to Kshs.438 billion with growth mainly driven by customer lending. Customer deposits increased by 5% to Kshs.270 billion.
The Bank said its investment in new businesses is bearing fruit with bancassurance, asset management, and financial markets products contributing significant profit to income growth in the period under review.
“Our capital position remains strong to continue supporting a robust balance sheet growth. We have also accelerated our investment towards enabling new growth areas, improving customer experience, and driving operational efficiency,” Mr. Awori said.
In 2022, the Bank has committed a capital investment of Kshs. 2 billion in over 70 projects that are designed to increase operational efficiency and improve customer experience.
Other Highlights include:
The efficiency efforts geared towards creating an easier, faster, and better customer experience have paid off and resulted in an improvement of cost to income ratio to 45% from 46% profit in the same period last year. Investments towards building the “most customer-obsessed, digitally-led bank” have resulted in improvement in Net Promoter Scores with approximately 90% of all our transactions now being serviced on alternate channels.
Impairment decreased by 15% compared to a similar period last year reflecting an improving macroeconomic environment for our business and our customers. The Bank’s average loan loss ratio reduced to 2.0% from 3.0% demonstrating the prudence of our lending decisions.
Capital & Liquidity
The Bank’s capital and liquidity ratios remain strong with sufficient headroom above the regulatory requirement. The Bank’s total capital adequacy ratio closed the quarter at 17% and liquidity reserve position at 36.7% against the regulatory limits of 14.5% and 20%, respectively.
The Bank is in the final phase of its five-year Growth, Transformation, and Returns strategy. Having delivered the core targets on Transformation and Returns strategic pillars ahead of time, the next phase of the execution will be primarily focused on accelerating growth to gain market share as well as improving customer experience.