Oral East AfricaAbsa Bank Kenya has reported a 12 percent growth in net profits of Kes16.3 billion for the year ending December 2023 as the lender transitioned in both board strategy and management.
Absa appointed Abdi Mohamed as CEO in May 2023, replacing Mr Jeremy Awori who left the lender after a decade that saw it switch brands from Barclay Plc.
Last year was also the inaugural year for Absa executing its ambitious five-year strategy to win market share and to solidify Absa's position on the continent.
The lender said it transitioned seamlessly scoring a 19 percent increase in revenues to Kes54.6 billion on new business lines such as bancassurance, asset management, and Timiza, all of which witnessed double-digit growth in the year.
“2023 was a transition year in the leadership of our business. We onboarded a new managing director, who was hired through a rigorous, competitive, and transparent process. That the transition took place seamlessly and the business continued on its growth trajectory is a testament to the resilience and commitment of the management team,” Absa bank said.
The transition was smooth mainly because Absa tapped Mr Mohamed an insider who prior to the Ceo role served as the Managing Director of Absa Bank Tanzania and acting Managing Executive for Retail and Business Banking, Africa Regional Operations.
Stable Exco
Absa have also maintained a rather solid executive team through the transition, underpinning long term stability to deliver growth.
With the transition behind them Absa bank looks stable in its pursuit for market share especially in retail and the small business market.
In its first year of the new strategy the lender already delivered an 18 percent increase in loans and advances to Kes336 billion.
This has not come without a cost as the lender saw an increase in NPLs to Kes35.2 billion. However Absa said they have made prudent provisioning to underwrite the struggling borrowers as it supports recovery.
It pays also that the Central Bank has loosened controls over lending rates allowing banks to price the new risks appropriately.
“Owing to a tough macroeconomic environment, and the Bank's principles of prudence in risk management, impairment increased by 43 percent to Kes9.2 billion in the period. This performance translated into an impressive return on equity at 23.7 percent, delivering on our commitment to continue enhancing value to our shareholders,” Absa ban said.
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