Dividend boom for Absa shareholders as profit up 10pc to Sh22.9B

Absa Bank Kenya Managing Director & CEO Abdi Mohamed during the release of the Bank’s 2025 annual financial results. [Wilberforce Okwiri, Standard]

Absa Bank Kenya shareholders are set for a windfall after the lender declared a total dividend of Sh2.05 per share for the 2025 financial year, a 17 per cent increase from the prior year.

This was on the back of stronger earnings and improved efficiency, boosting returns. 

The total dividend comprises an interim payout of Sh0.20 paid during the year and a final dividend of Sh1.85 per share approved by the board, payable on or about May 19, 2026, to shareholders on record as of April 30. 

Chief Finance Officer Yusuf Omari and Absa Bank Kenya MD & CEO Abdi Mohamed during the release of the Bank’s 2025 annual financial results. [Wilberforce Okwiri, Standard]

The payout amounts to approximately Sh11.13 billion based on the bank's 5.43 billion issued shares. 

While parent company Absa Group Limited, which holds a 68.5 per cent stake, will receive the largest portion of roughly Sh7.6 billion, the more than 63,000 individual and retail shareholders are collectively pocketing the remaining Sh3.53 billion from the dividend payout. 

The Kenyan unit of South Africa's Absa Group said net profit for the year ended December 31, 2025, climbed 10 per cent to Sh22.9 billion from Sh20.9 billion in a similar period a year earlier. 

Absa Bank Kenya MD & CEO Abdi Mohamed, Board Chairman Mohammed Nyaoga (C) and Chief Finance Officer Yusuf Omari during the release of the Bank’s 2025 annual financial results. [Wilberforce Okwiri, Standard]

Absa is the first tier-one lender to post its earnings for the year ended December, and investors are keenly watching the rest of the banking sector for signs of whether the strong performance is industry-wide. 

"In an operating environment that remains largely complex, our profit after tax grew by 10 per cent year-on-year to Sh22.9 billion, supporting sustainable returns on equity of 22.8 per cent," said Absa Bank Kenya. 

Operating expenses grew at a slower pace than revenue, helping the lender expand its margin despite a slight contraction in topline income. 

Absa revenue declined by two per cent to close the year at Sh61.4 billion from last year. 

"This decline is attributed to a reduction in interest rates, although it was offset by better cost of funds management," said the bank. 

Net interest income declined by six per cent, while non-interest income grew by 12 per cent to Sh18.1 billion, supported by its payments business, said the lender. 

The performance was underpinned by a sharp decline in loan loss provisions, which fell 12 per cent to Sh6.8 billion, reflecting improved asset quality and recoveries.

The results cap a recovery period for Kenya's banking sector, which faced significant headwinds in 2024 from currency volatility, high interest rates, and social unrest. 

A stabilising macroeconomic environment, easing inflation, and a relatively steady shilling have supported business activity and credit demand. 

Kenyan banks have been an oasis of hope for the economy as other sectors flounder, with resilient earnings and strong shareholder returns contrasting with struggles in manufacturing and agriculture.