Absa Bank Kenya quadruples profit amid falling loan impairment

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NAIROBI, August 26. (Reuters)Absa Bank Kenya ABSA.NR First-half profit before tax quadrupled year-on-year on the back of lower loan impairments and higher interest income, the company said on Thursday.

The bank said its pre-tax profit rose to 7.95 billion shillings ($ 72.5 million) from 1.6 billion shillings a year earlier.

The statement said that loan loss provisions dropped to 1.94 billion shillings from 5.4 billion shillings, while net interest income rose to 12 billion shillings from 11.3 billion shillings.

“We have done well, thanks in large part to rising interest income, especially in the SME segment, as we have stepped up our efforts to support businesses to recover from the effects of the pandemic,” Absa said.

“The numbers were also supported by a significant decrease in impairment associated with improved macroeconomic performance.”

In March 2020, the central bank of Kenya authorized lenders to restructure loans to companies affected by the COVID-19 pandemic and made them available by March 2 this year for restructuring.

Jeremy Awori, CEO of Absa Kenya, revealed in a virtual investor briefing that as of the end of 2020, the bank had restructured 62 billion shillings, or 30% of its loan portfolio.

He said that as of the end of June, 94% of restructured loans had resumed regular payments.

(1 dollar = 109.6800 Kenyan shillings)

(Reporting by George Obulutz; editing by David Goodman and David Holmes)

((george.obulutsa@thomsonreuters.com; Tel.: +254 20 499 1234; Reuters Messaging: george.obulutsa.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.

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