Absa Bank Kenya has achieved a significant financial feat, notably increasing its net profit by 14.8% over the nine months leading to September. This commendable growth, from Sh10.7 billion to Sh12.3 billion, primarily resulted from a surge in interest income from loans, marking a substantial stride in the institution’s financial performance.

Largely attributable to the income generated from loans and advances to its diverse customer base, the institution experienced a remarkable 33.4% increase in total interest income, rising from Sh29.3 billion to an impressive Sh39.1 billion. This signifies a robust lending strategy, with the bank’s loan book expanding significantly from Sh289.4 billion to Sh330.9 billion during this assessment period.

The positive financial trajectory is attributed to the prevailing trend of rising interest rates, allowing banks to set higher base lending rates than the previous year. Emphasizing its dedication to sound financial management, Absa Bank Kenya declares, “Reporting a 14.8% year-on-year growth in profit after tax to Sh12.3 billion; we have enhanced our return on equity by 25.2%.”

Despite this, the bank’s non-interest income only achieved a marginal increase from Sh10.1 billion to Sh10.8 billion; nevertheless, it made a significant contribution to the overall surge in profits. The Nairobi Securities Exchange-listed lender saw its total operating income escalate impressively by 20%, ascending from an initial figure of Sh33.4 billion and culminating at Sh40.1 billion.

The strategic transformation and diversification initiatives of Absa Bank Kenya account for its success, bolstering operational resilience and creating a diversified revenue pool. New business lines, such as asset management, digital finance, bancassurance, and stock brokerage, have delivered double-digit growth, significantly improving overall performance.

The period under review witnessed a 21.8% increase in the bank’s operating expenses, escalating from Sh18.3 billion to Sh22.3 billion; higher loan loss provisions primarily drove this rise, increasing from Sh5.03 billion to Sh6.76 billion. An uptick in staff costs also contributed significantly, rising from Sh7.4 billion to approximately 8% of its previous value, now standing at around Sh8.6 billion.

Absa Bank Kenya strategically decided to reduce its holdings of government debt instruments, aligning with other financial institutions aiming for higher returns through lending to ordinary customers—a noteworthy action. The bank slashed its trading-held government securities from Sh47.6 billion to Sh28.9 billion and reduced the value in the maturity-held portfolio substantially, now standing at about Sh76.6 billion.

In a proactive effort to bolster economic growth, Absa Bank Kenya declares its substantial commitment of Sh100 billion for micro, small, and medium-sized enterprises (MSMEs) financing. This formidable pledge, designed to stand strong over the ensuing three years, highlights the bank’s unwavering dedication towards nurturing MSME sector development across diverse value chains.

The introduction of the Wezesha Stock digital platform showcases Absa’s innovative approach in supporting SMEs: a solution that seamlessly integrates e-commerce and digital financing. This app-based tool enables SME clients to place supply orders directly through the platform, while Absa takes charge of facilitating payments towards manufacturers and suppliers.