Absa Bank Kenya has reported a 28 per cent jump in net profit to Sh20.9 billion for the financial year ending December 2024, attributing the performance to improved cost efficiency and a diversified revenue stream.

Absa Bank Kenya’s improved performance, according to Managing Director and CEO Abdi Mohamed, stems from a focused execution of strategic initiatives designed to drive customer growth. He noted that this approach not only reinforces the bank’s reputation as a trusted financial partner but also aligns with its commitment to a sustainable future.

"We are committed to making Absa a modern and innovative bank that supports individuals, and businesses of all sizes," Mohammed stated.

"Our goal is to provide solutions that expand access to finance, drive economic progress, and improve the customer experience."

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The bank’s cost-to-income ratio fell to 37.7 per cent from 39.7 per cent the previous year, supporting a stronger return on equity, which rose to 24.5 per cent.

According to the bank’s financial report, total income surged by 14 per cent to Sh62.3 billion, driven by a 15 per cent rise in net interest income to Sh46.2 billion and an 11 per cent increase in non-funded income to Sh16.1 billion.

Despite inflationary pressures and strategic investments, operating costs grew by 9 per cent to Sh23.5 billion, maintaining a positive income-cost gap.

“The cost-to-income ratio improved from 39.7 per cent in 2023 to 37.7 per cent in 2024, reflecting our commitment to efficiency,” the bank stated in its financial briefing.

However, the bank’s loan book contracted by 8 per cent to Sh309 billion due to sector-wide slow growth in lending, while customer deposits edged up by 1 per cent to Sh367 billion.

The loan-loss ratio increased to 2.9 per cent, attributed to prevailing macroeconomic challenges.

With a core capital ratio rising from 13.6 per cent to 17.0 per cent, the bank highlighted its strengthened financial position, allowing for future growth and capital distribution.

The return on regulatory capital also improved to 30.3 per cent, a 300-basis-point increase.

“The return on equity rose from 23.7 per cent in 2023 to 24.5 per cent in 2024, driven by better earnings and capital optimisation,” the report stated.

Looking ahead, the bank reaffirmed its focus on sustainable shareholder returns, maintaining a resilient balance sheet, and enhancing efficiency.

The Board of Directors has proposed a final dividend of Sh1.55 per share, bringing the total for the year to Sh1.75, a 13 per cent increase from the previous year.