One of Kenya’s top banks, Absa Kenya, saw its profits quadruple as a bounce-back in retail banking in the country, coupled with a steep decline in costs due to fewer loan defaults and operating expenses, kept earnings above the Ksh8.2-billion ($73 million) mark.
The Nairobi-based bank posted profit after tax of Ksh8.24 billion ($73.23 million) from January to September, more than a fourfold increase from the Ksh1.92 billion ($17.1 million) it reported during the same period a year ago.
Absa Bank Kenya, formerly Barclays Bank Kenya Limited, is a leading financial services provider in Kenya operating under Managing Director Jeremy Awori.
The bank operates as a subsidiary of the South Africa-based Absa Group Limited. Its core operations include retail, corporate, treasury and card services, with cross-functional relationships to support local businesses and SMEs.
Apart from the strong growth in its interest and non-interest income, its robust financial results in the first nine months of 2021 can be linked to cost strategies that yielded dividends in the period under review.
As a result of these strategies, the group’s operating expenses fell sharply from Ksh20.07 billion ($178.4 million) in the first nine months of 2020 to Ksh15.45 billion ($137.3 million). In this same vein, its interest expenses moderated from Ksh6.11 billion ($54.3 million) in 2020 to Ksh4.94 billion ($43.9 million).
Awori said the strong performance was driven primarily by a rebound in retail baking that led to a growth in interest income, particularly in the SMEs segment.
He added that the financial results validate the bank’s growth, transformation and income strategy to deliver value for stakeholders.
Due to the strong performance, Absa Kenya’s total assets improved from KSh387.87 billion ($3.45 billion) on Sept. 2020 to Ksh411.42 billion ($3.66 billion) as of Sept. 2021, while shareholders’ funds increased from Ksh44.62 billion ($396.5 million) to Ksh54.62 billion ($485.4 million).
With this resilient performance, shareholders are on course to pocket impressive dividends from the bank’s robust profit in 2021, while executives and directors in the leading bank will see an increase in their respective remunerations and fees for the year.
Awori is expected to take home a higher salary package in 2021. At the end of the bank’s 2020 financial year, he received a total salary package of $850,800 (KSh93.20 million) for his service.
