Absa Bank Kenya PLC has announced improved financial results for the year ended 31 December 2024, with net earnings rising by 28 percent to Ksh 20.9 billion from Ksh 16. 4 billion posted in the preceding year.
The listed bank’s performance was supported by increased interest income from customers. Interest income from loans and advances grew by 20.6 percent to Ksh 53.4 billion from KES 44.3 billion.
Other positives for the bank included an 11 percent increase in non-funded income which brought in KES 16.1 billion up from Ksh 14.5 billion, attributable to a recovery in the lender’s bond trading operations.
Absa Bank Kenya Managing Director & CEO, Abdi Mohamed, attributed the improved performance to the disciplined execution of strategic initiatives that support customer growth.
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“Our customers are at the heart of our success, and these results show their ability to adapt and grow. We are committed to making Absa a modern and innovative bank that supports individuals, and businesses of all sizes. Our goal is to provide solutions that expand access to finance, drive economic progress, and improve the customer experience,” said Mr. Mohamed.
Shareholders are set for a KES dividend per share payout. Despite the solid performance, Absa’s results showed the ravaging effects of a struggling economy.
Both the size and quality of the lender’s loan book declined in 2024. On size, Absa’s loan book shrunk by 8 percent to Ksh 309 billion from Ksh 336 billion a year before. Over the same period real estate, manufacturing, and consumer loans contributed to a rise in non-performing loans.
Gross non-performing loans increased 20.5 percent to Ksh 42.5 billion from Ksh 35.3 billion due to defaults in manufacturing, real estate, and the consumer business.
Because of the trinity of the above truants, the bank’s stock of non-performing loans ratio in 2024 rose to 12.3 percent compared to 9.6 percent in 2023.
Analysts said they expect Absa to lend more money to customers in 2025 to counteract the anticipated reduction in returns from other investments such as bond and FX trading.
“For FY2025 we expect the bank to grow its loan book as a defensive strategy against the expected decline in yields overall. This strategy should result in relatively commendable interest income growth, particularly in the second half of the year when more clients are benefiting from tighter monetary policy,” said a note by Sterling Capital.
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