Absa Bank Kenya will pay shareholders a total of Kes6 billion following a strong performance in 2021 where net earnings surged by 160 percent to Kes10.9 billion.
Absa’s net profit is largely attributable to growing income lines and lower operating expenses in the year.
Subsequent to the profit jump, the board has recommended the payment of Kes1.10 dividends per share to investors which translates to a total of Kes6 billion on or before May 26.
“We have drawn inspiration from the resilience of our customers and are committed to continuing to provide them with the financial solutions they need to pursue their growth ambitions. We are also pleased to resume dividend payment to our shareholders demonstrating the strength and resilience of our business,” Absa Bank Kenya CEO Jeremy Awori said.
The lender is attributing the strong growth to an uptick in interest income as the bank gave a hand up to businesses especially SMEs to recover from the negative effects of the Covid-19 pandemic.
In the year, Absa’s total operating income went up by 7 percent on the back of an 8.1 percent improvement in net interest income to close at Kes25.3 billion.
Further, non-interest-funded income increased to Kes11.7 billion from Kes11.1 billion owing to the bank’s evolving gains from the digitization of products and services.
“In the recent past, we have invested over Kes5 billion in different platforms and capabilities, including the launch of our first-in-market WhatsApp banking proposition, upgrade of our Timiza platform, and improvement of our Absa Mobile app with new features,” Mr Awori said.
In the 12-month period, Absa’s operating expenses fell by 16.7 percent largely on account of lower provisions for bad loans with the loan provisioning costs shedding 47.8 percentage points to Kes4.7 billion from Kes9 billion a year ago, pointing to the lender’s improving asset quality.
Absa now has an asset base of Kes428.7 billion compared to Kes379.4 billion in December 2020, including a Kes234.2 billion loan book.