Absa posts Ksh.8.5 billion normalized 2019 profit

Absa Bank Kenya has reported a normalized Ksh.8.5 billion profit after tax for the period ending December 31, 2019 on the back of higher operating income.

The lender, formerly known as Barclays Bank of Kenya returned a profit before tax and exemptions of Ksh.12.3 billion from Ksh.10.6 in 2018.

“We have begun seeing fruits from our investments in automation to not just efficiency in operations but also to better customer experience.” Absa Kenya Managing Director Jeremy Awori said in a call to investors.

Now known as Absa Kenya, the bank said its one off transition costs stood at Ksh.1.5 billion at the end of the period under review.

The lender’s total operating income stood at Ksh.33.8 billion in the period from Ksh.31.7 billion as both interest and non-interest income grew by six and 9.3 percent respectively

Absa’s loans and advances grew to Ksh194.9 billion from Ksh.177.4 billion in 2018 with investment in government securities rising by 25.3 per cent to Ksh.79.2 billion.

Total operating expenses in the period meanwhile held up at Ksh.21.5 billion from a flat Ksh.21 billion.

In the period, non-performing loans (NPLs) slid by 2.9 per cent to Ksh.13.5 billion attributed to efficiencies in dealing with customers.

“A significant portion of our loan book is secured in areas such as mortgages and asset financing. This has allowed us to safeguard our NPL ratios,” noted Absa Kenya Chief Finance Officer Yusuf Omari.

Absa Kenya now says it is in a position to grow its business, echoing ongoing mergers and acquisition in the Kenyan banking space.

“We are always on the lookout for an attractive acquisition. The reality however is that we have a duty to shareholders,” added Awori.

The bank has retained its dividend per share at Ksh.1.10 for the year as the company’s stock holds its earning per share (EPS) at Ksh.1.37.