Absa Bank signals dividend payout as profit quadruples

Absa Bank MD Jeremy Awori speaking during a partnership between Absa Bank & KEPSA to train and provide work opportunities for youth in the Digital Economy. [Wilberforce Okwiri, Standard]

Absa Bank Kenya net profit for the nine months ended September 2021 has more than quadrupled to Sh8.24 billion, on the back of increased income and reduced costs.

The latest net profit is 4.3 times more than the Sh1.92 billion that the lender posted in a similar period last year. The earnings are above the net profit Sh4.16 billion posted in full-year ended December 2020 and the full pre-pandemic earnings of Sh7.47 billion in 2019.

Absa, which froze dividends last year is showing the confidence of resuming the payout for the full year in what signals a good year for shareholders in the banking sector.

“Outlook on our business performance is positive and with the improved ef?ciency levels and returns, the bank aims to accelerate re-investments for growth to gain market share,” said Absa Bank Kenya managing director Jeremy Awori.

“We are con?dent to resume dividend payment for the ?nancial year 2021.” Absa had paid a dividend of Sh1.10 per share - amounting to Sh5.97 billion for the 2019 performance but withheld payout from last year results on the back of Covid-19 disruptions.

KCB Group, Standard Chartered Bank and Stanbic Holdings have all declared interim dividends on the back of recovering performance.

During the review period, Absa’s interest income rose from Sh17.1 billion to Sh18.57 billion while non-interest income grew from Sh8.31 billion to Sh8.74 billion. Operating expenses fell by 23 per cent or Sh4.63 billion to Sh15.45 billion, taking pressure off the bottom line.

This was helped by a 55 per cent fall in provisions for loan defaults from Sh7.6 billion to Sh3.4 billion in appreciation of the improving economic environment.

 “We are seeing early signs of recovery and we’ve been working closely with our customers and other stakeholders to keep turning the wheels of our economy,” said Awori.