Absa Bank Kenya has announced a robust financial performance for the full year, with its net profit surging by 27.5% to Ksh 20.9 billion, up from the previous year. This impressive growth has prompted the lender to propose a higher dividend payout of Ksh 1.75 per share, an increase from Ksh 1.55 per share paid out last year. Shareholders are set to benefit from this enhanced payout in May 2025, reflecting the bank’s confidence in its financial stability and future prospects.
The bank’s total interest income rose by 19.3% to Ksh 64.7 billion, driven by improved lending margins and increased customer deposits. Additionally, non-interest income grew by 10.8% to Ksh 16.1 billion, showcasing the bank’s ability to diversify its revenue streams through fees, commissions, and other services. However, operating expenses also climbed by 5.5% to Ksh 32.6 billion, primarily due to higher staff costs, which increased from Ksh 11.7 billion to Ksh 13 billion. This rise in staff expenses is attributed to the bank’s expansion strategy, including the opening of new branches across the country.
Despite a reduction in loans and advances to customers from Ksh 335.7 billion to Ksh 309.1 billion, the bank faced challenges with non-performing loans (NPLs), which increased from Ksh 29.4 billion to Ksh 35.3 billion. This uptick in NPLs pushed Absa Bank Kenya to raise its loan loss provision from Ksh 17.4 billion to Ksh 20.8 billion, reflecting a cautious approach to managing credit risk in a challenging economic environment.
The bank’s performance underscores its resilience and adaptability in a competitive market. By balancing growth in income with prudent cost management and risk mitigation, Absa Bank Kenya has positioned itself as a key player in the Kenyan banking sector. The proposed dividend increase is a testament to the bank’s commitment to delivering value to its shareholders while maintaining a strong financial footing. As the lender continues to expand its footprint and enhance its service offerings, it remains well-placed to navigate future challenges and capitalize on emerging opportunities in the financial landscape.
