ABSA Bank Kenya has recorded a significant increase in Profit After Tax (PAT) and a static dividend per share in its half-year 2025 results. Profit after tax rose by 9.1% to KES 11.7 billion from KES 10.7 billion in the same period last year. The significant increase was mainly driven by a 11.5% decline in operating expenses to KES 14.7 billion from KES 16.6 billion in H1 2024.
Absa’s Income Statement
Despite a 20.8% decline in total interest expense, Net Interest Income (NII) fell by 2.9% or 700 million to KES 22.3 billion from KES 23 billion in H1 2024. The decline is attributed to an 18.2% and 5.2% fall in interest income from loans and advances to customers and deposits and placements with banking institutions, respectively. Total interest income fell by 8.3% to KES 29.9 billion from KES 32.6 billion in H1 2024.
Non-interest income rose by 3.3% to KES 9.1 billion from KES 8.8 billion in the same period last year, largely driven by a 20% increase in both fees and commissions and other incomes. Operating income slid marginally by 1.2% to KES 31.5 billion from KES 31.8 billion in the same period last year.
Operating expenses shrank 11.5% to KES 14.7. The contraction was mainly attributed to a substantial 38.5% decrease in loan loss provision from KES 5.2 billion to KES 3.2 billion in H1 2025, and a 4.3% decline in depreciation on property and equipment. Cost-income ratio stood at 36.4%, up from 35.0% in H1 2024.
Profit Before Tax (PBT) grew by 10% to reach KES 16.8 billion from KES 15.3 billion in H1 2024, while profit after tax climbed 9.1% to KES 11.7 billion from KES 10.7 billion in H1 2024, the highest ever in H1 by the Bank.
Gross non-performing loans surged 12.3% to KES 44.2 billion from KES 39.4 billion in H1 2024. Earnings per Share (EPS) went up by 9.1% to KES 2.15 from KES 1.97 in H1 2024, while Dividend per Share (DPS) remained at KES 0.20.
Absa’s Balance Sheet
Total Assets grew by 10.4% or KES 50.2 billion to reach KES 531.6 billion from KES 481.4 billion in H1 2024. Customers’ deposits reached KES 361.3 billion, up 2.3 % from KES 353.3 billion in H1 2024, while net loans and advances contracted 3.6% to KES 304.9 billion from KES 316.4 billion in the same period last year. The loan deposit ratio went down to 84% from 90% in H1 2024. Return on Equity declined by 3.1% to 26.5%, ahead of the bank’s plan (cost of equity +5%).
“The loan to deposit ratio has come down to 84% because of a drop in lending, liquidity ratios have picked up in this period. Return on Equity is at 26.5%, which is above our cost of equity. Cost of equity for us is around 18%,” said Yusuf Omari, Absa Kenya CFO.
Also Read: Absa Bank Kenya Reports KES 6.2 Billion Net Profit in Q1 2025 Amid Market Challenges
