Absa Announces Ksh14.6 Billion Profits, Increases Dividends 

Absa Bank Kenya on Tuesday, March 14, announced a profit after tax of Ksh14.6 billion for the full financial year ended December 31st, 2022. 

This is a 34% growth in profit up from the Ksh10.87 billion net profit recorded in the 2021 financial year.

 The development came as good news for its shareholders who will earn increased dividends of Ksh1.35 per share. This is a 23% growth in dividends from the previous period. The total dividend payout is Ksh7.3 billion. 

Read Also: 2022 Money Confessions: ‘I Tried Saving Ksh500k in 2022 with My 100k Salary - I Failed’

Absa Bank Kenya is listed at the Nairobi Securities Exchange and on Tuesday, March 14, the stock closed at Ksh12.55. 

The lender attributes the growth in profitability to double-digit growth across all the bank’s business segments.

Growth Areas 

In this regard, customer loans in the reviewed period grew by 21% to Ksh284 billion. Customer deposits rose by 13% to Ksh304 billion further supporting balance sheet growth.

“Total revenues went up 25% to Kshs.45.9 billion, driven by a 28% growth in net interest income of Kshs.32.3 billion. This was supported by increased lending, including to the Small and Medium Sized Enterprises (SMEs) and to key economic sectors such as manufacturing, energy and agriculture in recognition of the critical role they play in the advancement of our economy and job creation,” the bank reported in a public statement. 

Read Also: Digital Savings Accounts: Should You Open One in 2023?

The bank also cited its aggressive innovation plan as a key contributor to the positive result. Absa has recently rolled out a number of technological changes that have seen 92% of its transactions being done outside a bank branch. 

Innovative Banking Products

The innovative rollouts include the digital onboarding platform - an instant online account opening option - as well as the nationwide distribution of Cash Deposit Machines. 

Absa has also expanded the agency banking platform, with 668 Absa outlets so far commissioned. The bank has also had strategic partnerships to enhance customer experience, such as the partnership with Visa which allows domestic and cross-border remittance. 

Absa Bank Kenya’s Interim Managing Director Yusuf Omari noted that the growth recorded in the background of tough macroeconomic challenges demonstrated the bank’s resilience and promised an increased growth trajectory. 

"We are pleased with this outstanding financial performance, which was achieved in the face of an unprecedented and complex operating environment characterised by significant events such as the General Elections, drought, and persistent Covid-19 pandemic impacts.”

Read Also: How to Save Ksh1 Million in Kenya When Your Monthly Salary is Ksh80,000-Ksh100,000

“This set of results is a clear demonstration of our remarkable success in executing our Growth, Transformation and Returns Strategy where we outperformed in all the core measures. We have significantly transformed our business and set a strong foundation to outperform in the next horizon of our strategy,” Omari stated. 

Standard Chartered Bank FY Results

The Standard Chartered Bank Kenya on the same day released its financial results for the 2022 financial year which similarly recorded a growth in profitability.

The bank’s full year net profit surged from Ksh9 billion in 2021 to Ksh12.1 billion 2022, a 34% increase. The operating income rose from Ksh29.2 billion the previous year to Ksh34 billion.

The Bank’s operating expenses, however, rose from Ksh14.5 billion to Ksh15.6 billion in 2022 which was attributed to inflation and increased investment in digital channels.

Read Also: Buy, Build, or Rent? How do I Know What's Best For My Family

Kariuki Ngari, Standard Chartered Bank Kenya Chief Executive Officer, said: “We have delivered a strong set of results in 2022, with profit before tax up by 36%, with business momentum driving top-line growth of 16 per cent."

“Our Wealth Management, Transaction Banking and Financial Markets products performed strongly. I am particularly pleased with our discipline around expenses that helped us navigate the inflationary pressures of 2022 but still allowing us room to invest in our digital capabilities. Our costs were up by 8% in comparison to the double-digit growth in income of 16%, enabling us to deliver a strong income-to-cost jaws of 8%.”

The board has recommended a final dividend of Ksh16 per share in addition to the Ksh6 interim dividend paid in December 2022.

Stanbic Bank FY Results

Earlier this month, on March 9, Stanbic Holdings announced a 40% increase in dividend payouts for the period ended December 2022 following a 26% increase in net profit. 

At Ksh12.60 per share, this is the highest dividend the lender has ever issued in its history. This is up from Ksh9 the previous year. 

The lender’s net earnings surged to Ksh9.06 billion up from Ksh7.21 billion in 2021. This has been attributed to growth in interest income as a result of increased lending and a rebound in non-funded income.

Patrick Mweheire, Standard Bank Group East Africa regional CEO, attributed the performance to growth across the financial segments that Stanbic operates.

“We are extremely excited to be paying such a level of dividend. The operating environment remains challenging, but we are happy to see growth come back,” said Mweheire.