Absa Bank FY 2019 normalized after-tax profit up 15%

0
232
Absa
PHOTO/COURTESY: screenafrica.com

Absa Bank Kenya has reported a normalized profit after tax of Ksh. 8.5 billion for the period ended 31 December 2019, a growth of 15% compared to a similar period last year. 

The performance is mainly attributable to a 7% growth in total income, 1% growth in operating costs partially offset by a 9% growth in impairment.

Total assets grew by 15% year on year driven by growth in customer loans, government securities as well as other liquid assets. Net customer loans were up 10% to close at Kshs195 billion driven by key focus products namely; general lending, asset finance, mortgage and scheme loans that recorded strong growth year on year.

The lender’s deposits grew by 15% to Ksh..238 billion with transactional accounts making up 70% of the total deposits while total income increased by 7% to Ksh.33.8 billion driven mainly by the growth of non- interest income, which was up by 9% year on year.

The main areas of growth were risk fees, fixed income trading, and risk-managed products (RMPs).  Interest income grew by 5% from the previous year largely because of growth in the lending book; though partially offset by the margin compression as a result of a drop in Central Bank Reference rate (CBR).

The Bank’s costs were well managed at Ksh.17.3 billion reflecting a 1% increase year on year largely because of spend discipline and cost save initiatives. The cost saves initiatives included the automation of the processing centers, investment in alternative channels and branch rationalization programs. The savings derived were used to fund sustainable investments, especially in automation and digitization.

“What has been really exciting about our transition is that we are building on a strong foundation, a rich legacy that spans over a century. As we look into the future, we are excited about the opportunities as well as the challenges. Particularly so because, just like our fellow Kenyans, challenges present us with opportunities to be innovative, to create and continue adding value to our communities. We are excited about this and the chance to co-create the future of our country,” Absa Bank Kenya PLC Managing Director, Jeremy Awori, said.

Absa Bank Kenya Plc capital and liquidity ratios remain strong with sufficient headroom above the regulatory requirement. In the period, the total capital adequacy ratio stood at 16.7% and liquidity reserve position at 35.7% against the regulatory limits of 14.5% and 20% respectively.

ALSO READ: Barclay Bank begins trading as Absa Bank Kenya

LEAVE A REPLY

Please enter your comment!
Please enter your name here