Category Archives: ABSA

Absa Kenya rebounds from Covid hit

As the wave of quarterly financial results by Kenyan banks stream in this month, the banking industry appears to have recovered from the early effects of the Covid-19 pandemic. 

Absa Bank, Kenya’s fifth-largest bank with assets of Kshs 398 billion ($3.6 billion), released its results, showing a 5x growth in pre-tax profits in the half-year, from 1.6 billion last June to 8.0 billion in June 2021. In the half-year period,  it made provisions of Kshs 1.9 billion compared to Kshs 5.3 billion last June. Overall, loans have grown from Kshs 202 to 219 billion (8%) while deposits have grown from Kshs 249 to 264 billion, representing a loan-to-deposit ratio of 83%. 

The banking industry made many responses to Covid-19, including reducing digital bank charges and restructuring customer loans. Absa restructured 59,000 loans worth Kshs 62 billion, representing 30% of its balance sheet. Absa Kenya’s Managing Director, Jeremy Awori, said it had been a good initiative to work with customers as, by June 2021, 94% of the loans have resumed repayments and the bank’s non-performing asset levels were down to below the industry average of 14%. 

In the last seven years, the bank had doubled the size of its balance sheet, navigated the re-branding from Barclays to Absa, and brought down its cost to income ratio from 53% to 45%.

Absa will optimize costs through technology to improve banking services. In 2021, it will invest Kshs 1.6 billion in technology initiatives; they have already launched WhatsApp banking and will upgrade the Timiza digital banking platform, expand agency banking, automate securities trading and increase cash deposit ATMs and rollout of contactless cards. 

Going forward, Absa Kenya management expects that, with the built-up strong capital and liquidity, the bank will be in a good position to pay a dividend to the shareholders at the end of the year which they missed last year.

Absa Kenya launches Asset Management

Absa Bank Kenya has rolled out an asset management subsidiary following approval from Kenyan regulators to expand its century-old business of offering financial services in the country. 

Following approval by both the Capital Markets Authority (CMA) and the Retirement Benefits Authority (RBA), Absa Asset Management will offer advice and products for customers to invest in listed shares, treasury bonds, corporate bonds, private equity, property, offshore and other investment classes.

Anthony Mwithiga, the CEO of the new Absa Asset Management unit, said they would offer fund and investment management for institutions, such as pension schemes, retail solutions for the mass market, and bespoke or personalized services for high-net-worth individuals.

The retail solution will offer investment opportunities through five different unit trusts being, a money market fund for Kenya shillings or US dollars, a bond one, a balanced fund, and an equities fund that people can subscribe to for as little as Kshs 1,000. All the classes will benefit from the data-driven insights, investment professional advice and risk management of Absa that is guided by three pillars of value growth, income generation and value preservation.

The CEO of the RBA Nzomo Mutuku said that that investment management, now with Kshs 1.4 trillion of assets under management, still has great potential to grow and that the performance of these investments is what drives pension benefits in Kenya, not pension contributions.

He said that being diverse had sustained growth even during Covid-19. While there has been a decline in interest for corporate bonds, private equity has gone up (from 0.07% to 0.12% as a share of portfolios) and good returns had also been got from ETF‘s that are about to get a boost from a new class for fixed income, and REIT‘s from new tax laws. He added that, when the shilling depreciates, offshore investments deliver good performance. Another new class is now infrastructure in which funds can invest 10% of assets and they are waiting to see which Public-private-partnership (PPP) projects come online.

Idea Exchange: Antler, Forbes, Museums, ODM.

New, and ongoing, opportunities to apply for.

  • As part of their one-year anniversary celebrations, Absa Kenya has invited people to write in on “Wall of possibilities” of community-uplifting things that they would like to Bank to fund. Each idea may get up to Shs 2.5 million and the deadline is 5 March.
  • Antler Global is seeking new startup companies to support with funding and mentoring. The Nairobi deadline is in April, and here’s a glimpse of the 2020 cohort at Antler.
  • Nominate the Woman Entrepreneur You Admire Most to the COMESA 50 Million African Women Speak Platform.
  • DFC, the U.S. International Development Finance Corporation is offering financing of between $3 million and $50 million to African companies in support of the continent’s COVID-19 recovery – via Asoko
  • The Forbes Africa 30 Under 30 Class of 2021 in categories for creatives, sports, and business and technology.  Deadline is March 31.  
  • Apply for the 2021 Global Teacher Prize ($1 million) and the new sister award, the Chegg.org Global Student Prize ($50,000). Deadline is 30 April.
  • The Hack the Normal hackathon takes place between 5 – 7 March 2021, invites participants to develop new products, services and business models with commercialization potential in these businesses and create solutions for financial challenges, sustainable living and healthy living.
  • The new Kikao64 co-working hub at Eldoret has 50% discount for non-profits, athletes and startup businesses, while others who sign on through the end of April 2021, get discounts of 25%.
  • The Konza innovation challenge offers $5,000 of funding for startups to pilot their innovations at the Konza Technopolis. Deadline is March 19. 
  • edit The Communication Authority of Kenya 2021 Kuza Awards rewards excellence in broadcasting. Regulatory awards are for compliance, local content, children & broadcasting, regional broadcaster, upcoming broadcaster and copyrights. Also, People Choice awards for favorite radio station, TV station, pay TV, news Radio station and TV station. This year has a theme for “Preserving our Heritage through Broadcasting (Kenya a Heritage of Splendour)”, and there is a Patriotic Award category with awards for Uzalendo Award (airing announcements on Covid-19) and Mzalendo Mkuu Award (educational content). SMS Kuza to 15601 to vote for free.
  • Mask Art awards are open to schools and young people under 25 in categories of the school of the future, young entrepreneur and environmental activist. Deadline is April 1.
  • The East Africa Maritime Awards (EAMA) recognize and award notable users of the Port of Mombasa. Organized by the Kenya Ports Authority, it is open to shipping, ports, services, engineering, and leisure marine industries with operations in Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan, and the Democratic Republic of Congo (DRC).  The deadline has been extended to March 31.
  • edit From the MasterCard Foundation comes the Baobab’s Got Talent challenge, an exciting storytelling opportunity for young creatives (animation, graphic design, video production) in Africa. Deadline is March 15.
  • From MIT Solve, the 2021 Global Challenge and Solve’s first US Challenge on Antiracist Technology are now open. Anyone anywhere can submit a solution to become part of the 2021 Solver class and access more than $1.5 million in funding.
  • The National Museums of Kenya is seeking historical memorabilia on Kenya, from the year 1800. The items, including photos, film, memorabilia, weapons, musical instruments, farm tools, art, newspaper cuttings, passbooks, etc. can be donated or shared on a long-term loan basis. The deadline is 19 March.
  • For the presidential candidate at ODM, the party is seeking a committed, passionate disciplined and dependable party member who can mount a successful campaign. The entry fee is Kshs 1 million and with a reduced amount of Shs 500,000 for women, youth or persons with disabilities. Deadline is 31 March. 
  • Post Office boxes are available across Kenya. Pick one up by March 31 and get a 30% discount.
  • edit SEED, the Stanford Institute for Innovation in Developing Economies, partners with entrepreneurs (CEO’s / founders) in Africa and South Africa emerging markets to build thriving enterprises that transform lives. Applications deadline is April 15.
  • edit The Eastern and Southern African Trade and Development Bank (TDB) and Asoko Insight have launched a Renewable Energy DealRoom to accelerate the financing of renewable energy projects in the region served by TDB.
  • The Thunderbird School of Global Management is offering a unique scholarship for Africans to attend the online Masters of Applied Leadership & Management with a specialization in Public and Global Affairs starting on March 8, 2021. African students will pay a special tuition of $12,000, compared to $33,000 for other students, representing a scholarship of $21,000.
  • The Tony Elumelu Foundation has the seventh round of its entrepreneurship program in which, with partners, they are seeking to boost 1,0000 businesses and also assist others to recover from Covid-19. This year, 1,000 businesses will receive $5,000 in seed capital, business training, mentorship, and global networking opportunities.  Apply before March 31. 
  • edit The Visa Everywhere Initiative targets fintechs to join a global innovation program. Apply by May 7.
  • edit Nominations for the Africa Food Prize 2021 are ongoing, a $100,000 celebration of African agriculture achievers.

Absa seedlings promote food security in Kitui

At Yatta today, Absa Kenya donated Kshs 4 million at the launch of a partnership between the Kitui County Government and World Vision.

Chronic food insecurity is a challenge for households and families in many parts of Kitui County and this has increased during COVID-19 which has impacted the economy as people in the area lost their jobs. Caroline Ndungu, Absa’s Marketing Director said being a force for good in society was one of the strategic pillars for the Bank which celebrated its one-year anniversary in the country last week, after completing a four-year brand transition.

Jame Agin, Absa’s Corporate Director said the Bank will seek to collaborate with the County Government of Kitui, which is a largely agricultural and pastoral region, but with perennial hunger and water problems, to finance commercially-scalable agriculture projects, as a solution to the community’s problems while deriving value for Absa’s shareholders.

The funding from Absa will be used to procure drought-resistant seedlings of green grams, sorghum and cowpeas which will be distributed by World Vision to 2,000 households in the Yatta area. This is part of a county food security enhancement program called the “Ndengu Revolution” led by Governor, Charity Ngilu, that aims to address the perennial food shortages in Kitui.

Absa Kenya One Year Anniversary

Absa Bank Kenya celebrated its one-year anniversary at its newly-redesigned Queensway Branch in downtown Nairobi today. It has been a strange first year for Absa which completed the transformation from the Barclays brand in February 2020, three weeks days before Kenya was enveloped by Covid-19 and underwent a shutdown that, while it has progressively reduced, still affected thousands of business, jobs, and customers, as well as the bank itself.

Speaking at the event, Absa Kenya Managing Director Jeremy Awori said the bank had a great strategy to grow and expand, then Covid-19 hit and the year turned to be one of the challenges for the bank, industry, local and global economy. Absa also began to see opportunities for impact and to demonstrate its humanity and innovations to enable the bank to serve customers as they worked to rebuild their livelihoods. They adjusted to have half their staff work from home and instituted a shift arrangement for front-line workers and these enabled 100% of branches to remain open, while the digital platforms had 99% uptime.

Absa offered financial relief to help customers navigate the pandemic after many lost jobs and businesses. They restructured Kshs 62 billion worth of loan repayments, extending relief to over 59,000 customers. They also continue to lend a sizeable amount to SME’s to stay afloat and provide employment, and also committed to paying small suppliers of the bank within seven days to boost their cash flow.

He added that the bank was cautiously optimistic that 2021 will be a better year, with news of vaccines giving confidence to business and governments to relax containment measures and turn to boost economies. Absa Kenya will invest Shs 1.6 billion in 60 technology projects to enhance customer experiences. One will be to automate loan top-ups, allowing people to get loans on top of existing loans, and another will be a new online business-banking platform.

Absa Kenya Chairman Charles Muchene said the bank contributed Shs 50 million to the Kenya Covid Fund, invested Shs 30 million in initiatives led by partners, and donated 210,000 masks for medical workers, with another 20,000 to boda-boda operators. The bank is now asking Kenyans to join and to help underprivileged. They launched a “Wall of possibilities” for people to write suggestions or ideas on the bank’s social media pages or at the Queensway branch on ways that the bank can assist communities to benefit. Absa may fund each idea with up to Shs 2.5 million.