Absa Bank Kenya has announced a record dividend payout of Sh9.5 billion, reflecting a 12.9% increase to Sh1.75 per share following a robust 27.5% rise in net profit for the 2024 financial year. The bank’s Sh20.87 billion net profit marks a significant improvement from Sh16.3 billion in the previous year.
The board has recommended raising the final dividend per share to Sh1.55, up from Sh1.35 in the previous year. Combined with the Sh0.20 interim dividend, the total dividend payout reaches Sh1.75 per share. Payments to eligible shareholders will be made on May 22, based on the register as of April 30.
CEO Abdi Mohamed credited the strong financial performance to continued efficiency improvements, automation, and a strong return on equity. Key drivers of profitability included a 15% rise in net interest income to Sh46.23 billion and an 11% increase in non-funded income to Sh14.5 billion.
Chief Financial Officer Yusuf Omari noted that the lender disbursed Sh180 billion in new loans, despite an overall loan book decline to Sh309.1 billion from Sh335.7 billion. This decline was attributed to the depreciation of the shilling against the US dollar, affecting the bank’s 32% foreign currency-based loan book.
Omari highlighted a shift in customer preferences toward short-term loans due to high interest rates. Businesses avoided long-term commitments, while consumers opted for credit solutions with shorter repayment periods. However, consumer appetite for loans is now recovering, signaling improved economic confidence.
Meanwhile, operating costs dropped 5.5% to Sh32.6 billion from Sh30.89 billion, attributed to reduced provisioning for non-performing loans and staff cost savings. The bank also invested Sh3 billion in automation to enhance operational efficiency.
Despite strong earnings, Absa’s non-performing loans (NPL) ratio rose to 12.3% from 9.6%, particularly impacting manufacturing and real estate sectors. To ease pressure on struggling borrowers, the bank restructured and rescheduled Sh3.4 billion in loans.
Mohamed emphasized that Absa remains committed to supporting customers while ensuring financial stability. The bank’s performance reflects resilience in a challenging economic environment and a strong focus on long-term growth and shareholder returns.
