Absa Kenya has announced a remarkable 34% increase in net profit, reaching Sh5.9 billion for the period ending 31 March 2024. This significant growth underscores the success of the bank’s strategic focus on the retail market, as initially outlined in 2023. The retail banking model, targeting high-volume, low-margin operations for the low-income segment, has proven highly effective.
The bank’s diversified revenue streams have been bolstered by new ventures such as bancassurance, asset management, Timiza, and stock brokerage, contributing to a 19% increase in total revenues to Sh16.5 billion. This diversified approach has not only driven revenue growth but also increased Absa Kenya’s resilience in a competitive market.
Interest income surged by 22% to Sh11.4 billion, while non-funded income rose by 13% to Sh5.1 billion. These gains highlight the strength of Absa Kenya’s strategic initiatives and its ability to adapt to market demands. The growth in loans and advances by 5% to Sh327 billion and customer deposits by 14% to Sh355 billion further solidify the bank’s strong performance.
Managing Director and CEO Abdi Mohamed attributed the positive financial outcomes to the bank’s resilience and alignment with strategic objectives. The first quarter of 2024 saw substantial growth in customer numbers, driven by innovative products, technologies, and relationship models. Absa Kenya also maintained its stronghold in critical sectors such as agriculture, trade, and manufacturing, alongside corporate and investment banking.
While underlying costs grew by 11% due to investments in human capital and digital transformation, the cost-to-income ratio improved to 33.9%. This improvement reflects the bank’s efficient management practices and commitment to sustaining strong business performance. The slight increase in impairment also demonstrates prudent risk management.
Absa Kenya’s capital adequacy ratio stood at 17.9%, and its liquidity reserve position was 33.5%, both well above regulatory requirements. These robust ratios indicate the bank’s solid financial health and its capacity to support continued growth and investment.
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