Rebranding flattens Absa profits

Absa Bank Kenya, formerly Barclays Kenya, has registered flat growth to post a profit after-tax of Sh7.45 billion for the financial year ended December 2019.

The listed lender had posted an after-tax profit of Sh7.41 billion in 2018.

It attributed last year’s slow growth to a Sh1.5 billion spending on rebranding to Absa.

Normalised net profit without the rebranding costs stood at Sh8.5 billion or a 15 per cent growth from the previous year.

Absa Kenya Chief Executive Jeremy Awori yesterday attributed the performance to the growth in the bank’s total income at seven per cent, which was more than the one per cent increase in operating costs.

Income grew to Sh33.8 billion driven mainly by the growth of non-interest income, which went up by nine per cent.

The main source of non-funded income included risk fees, fixed income trading and risk-managed products.

During the period under review, interest income from loans grew by five per cent from the previous year largely because of growth in the lending book.

New customer loans went up by 10 per cent to Sh195 billion owing to a focus on increased general lending, asset finance, mortgage and scheme loans.

New customers loans together with a growth of nearly 50 per cent in government security holdings, helped push up the bank’s total assets to Sh374 billion.

Government securities increased from 29.7 per cent to Sh43.7 billion. On liabilities, customer deposits grew by 15 per cent to Sh238 billion, with transactional accounts making up 70 per cent of the total deposits.

“What has been really exciting about our transition is that we are building on a strong foundation, a rich legacy that spans over a century. As we look into the future, we are excited about the opportunities as well as the challenges,” said Awori.

The bank rebranded after Absa bought a majority stake in Barclays Africa Group, which held the lender’s operations on the continent.