Absa to pay Sh9.5 billion dividend as net profit jumps to Sh20.9 billion

Absa Bank has announced Ksh 9.5 billion dividend payout for the year that ended December 31, 2024.

This is a 13 per cent increase from the dividend distributed in the last financial year as it translates to Ksh 1.75 per ordinary share.

The move follows an increase in net earnings in the period under review by 28 per cent to Ksh 20.9 billion reflecting the bank’s continued commitment to supporting businesses, individuals, and key economic sectors that contribute to Kenya’s economic progress.

During the review period, the bank’s customer loans and advances closed at Ksh 309 billion.

The bank expanded financial access in notable sectors such as manufacturing, trade, commercial property affordable housing, and renewable energy, amongst others, providing Ksh 180 billion in new gross lending.

Additionally, customer deposits increased to Ksh 367 billion, reflecting customers’ growing confidence in Absa as a leading financial partner.

In the period, total revenue grew by 14 per cent to Ksh 62.3 billion, supported by a strong funded income of Ksh 46.2 billion and an 11 per cent increase in non-funded income to Ksh 16.1 billion.

Absa Bank Managing Director & Chief Executive Officer Abdi Mohamed attributed the improved performance to the disciplined execution of strategic initiatives that support customer growth while reinforcing the bank’s reputation as a trusted brand committed to advancing a sustainable future.

“The 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,” the CEO said.

He further highlighted Absa’s ongoing investment in digital transformation to enhance customer experience and its commitment to employee growth through talent development, future skills investment, and well-being initiatives that have earned the Bank recognition as a top employer for several years.

In expanding financial access, Absa grew its agency banking network to 3,000 locations nationwide, with plans to scale to 17,000 outlets over the next two years.

The Bank continues to invest in its digital capabilities, with 93.6 per cent of transactions taking place on digital channels.

Supporting SMEs and businesses remained a priority, with increased access to financing, market opportunities, mentorship, and digital solutions.

As part of these efforts, the Bank empowered over 35,000 small enterprises and women-led businesses with essential financial and non-financial skills to help them navigate the challenging landscape.

During the year, Absa reinforced its long-term commitment to sustainability, with over Ksh 47 billion advanced in sustainable finance.

The bank’s 2024 performance has resulted in an increase in return on equity to 24.5 per cent, which supports capital distribution to shareholders.

While the ongoing transformational investments contributed to a 9 per cent cost increase, bringing total costs to Ksh 23.5 billion, the bank showed a 300-basis points improvement in its cost-to-income ratio to 37.7 per cent.

Impairment improved by 200 basis points to Sh9.1 billion compared to the same period last year, reflecting the Bank’s commitment to prudent risk management principles amidst balance sheet growth and a challenging operating environment.

Despite this increase, the Bank continues to maintain a healthy portfolio quality and has established a sufficient coverage ratio to effectively minimize and manage potential future credit losses.

The Bank’s capital and liquidity ratios remain strong with sufficient headroom above the regulatory requirement.

The Bank’s total capital adequacy ratio closed at 20.4 per cent and liquidity reserve position at 42.5 per cent against the regulatory limits of 14.5 per cent and 20 per cent respectively.

The strong position of Capital will support the Banks growth and investments agenda.