Absa Bank Kenya continued to show strong growth in a complex environment of macroeconomic challenges and high inflation. At the announcement of financial results for the first half of 2022 in Nairobi, Managing Director Jeremy Awori said the institution has transformed into a financial services giant with new offers in bank assurance, wealth management, risk management, research, and asset finance. These are all built around being a digital-first entity with products like Timiza which added 4 million accounts, leading to a five-fold growth in the number of customers they serve.
In the first half of the year, Absa Kenya had its fastest revenue growth in a decade with income growing by 17% to Kshs 20.9 billion and they recorded a pre-tax profit of Kshs 9.1 billion, a 15% increase. Loans were up 19% to Kshs 262 billion and deposits up 7% to Kshs 282 billion, and Absa Kenya assets are now Kshs 445 billion.
Absa Kenya’s Chief Strategy Officer Moses Muthui said that revenue was now growing faster than their peers in the banking industry and their strategy will be to stay relevant to customers by growing opportunities that offer sustainable and inclusive growth. Absa’s cost-to-income ratio is 42%, against a five-year target of 45% and this allows the bank to invest in areas to innovate for customers. As part of their next five-year strategic plan, starting from 2023, they will grow into other new businesses like asset management and consumer payments businesses such as diaspora remittance. They will re-enter the custody business that Barclays exited a decade ago to serve international clients as well expand their investment banking services across East Africa.
To give returns to investors and enhance shareholder value, Absa Bank Kenya will pay a Kshs 0.20 per share dividend, amounting to Kshs 1.09 billion, one of the few institutions that will pay an interim dividend. Already shareholders of the Nairobi-listed bank have one of the highest returns on equity at 23% and dividend yields.