Absa Bank Q3 profit up to Sh8.2b on interest income growth

Absa Bank Kenya has posted a Sh8.2 billion net profit for the period ended September 30, 2021 compared to Sh1.9 billion similar period last year.

Managing Director Jeremy Awori (pictured) attributed the growth to interest income from the small and medium enterprise (SMEs) segment, with the lender stepping up efforts to help them recover from Covid-19 effects and reposition for growth.

“The pandemic and its negative effects continue to persist, but we have drawn inspiration from our customers to rise above the storm and continue working together to keep the wheels of our economy turning.

We are optimistic that we shall make good our commitment to continue innovating and enhancing our customers’ banking experience,” he said. Despite the negative economic effects of the pandemic, all business units remained profitable, registering growth on key lines.

Increased lending

Total income increased by 7 per cent to Sh27.3 billion, due to higher interest income, which increased by 9 per cent year on year due to increased lending.

This was, however, partially offset by margin compression as a result of drops in the Central Bank Rate (CBR) whose benefits the bank passed to customers as a responsible lender.

Non-funded income also grew by 5 per cent on the back of new innovations and digitisation, while costs fell by 3 per cent year over year.

Net customer loans increased by 9 per cent to Sh229 billion, due to growth in general lending, trade loans, mortgages, and scheme loans, while customer deposits increased by 9 per cent to Sh269 billion, with transactional accounts accounting for 69 per cent of the total deposit book.