Absa Bank profit jumps 161pc on business lending

Absa Kenya has reported Sh10.2 billion in net profit for the year ended December 31, 2021 on the back of increased earnings from its corporate and business banking.

The lender’s net interest income rose marginally to Sh25.1 billion as at December 2021, from Sh23.2 billion the previous year.

“Wholesale banking - corporate and business banking - is one of the products that has done well, which is an emphasis on how the economy is picking up after the effects of the pandemic,” said Absa Bank Kenya Chief Financial Officer Mr Yusuf Omari (pictured).

Overall, the bank saw net lending increase 12 per cent - from Sh208 billion recorded in 2020 to Sh234 billion last year. 

“A lot of the investors froze investments during Covid and we have seen them now coming back across almost all sectors, apart from hospitality which is still muted,” said Mr Omari.

This is the highest profit the bank has posted in more than five years, and the board of directors has recommended a dividend payout of Sh6 billion.

Customer deposits grew by seven per cent - from Sh253 billion in 2020 to Sh270 billion in the year under review, with total assets growing by Sh42 billion to stand at Sh374 billion.

Absa Kenya Chief Executive Mr Jeremy Awori said credit performance is improving with loans that were previously restructured now back on track. “We restructured Sh62 billion in loans, which is over 60,000 customers during Covid-19, and as at now 95 per cent of them are regularised,” he said.

Mr Awori said the lender was in talks with the Central Bank of Kenya (CBK) and other stakeholders on the adoption of risk-based pricing on its facilities.

“These discussions have been going on and we are engaging the CBK and other stakeholders to establish a model that works for us and also for our customers,” said Mr Awori.