Absa Kenya, linked to Kenyan tycoon Baloobhai Patel, posts $229.3 million profit in 2024

Key Points

• Absa Kenya’s net profit jumped 81% to $229.3 million, fueled by strong interest and non-interest income growth, despite a shrinking loan book and forex income decline.
• Revenue rose 14.1% to $481.1 million, with consumer banking contributing 48% and wholesale 52%, signaling the bank’s diverse income streams and strategic business mix.
• Baloobhai Patel, who holds a 1.03% stake, stands to benefit from Absa’s higher dividend payout, which has increased to Ksh1.75 per share.

Absa Bank Kenya, a leading Nairobi-based lender partly owned by Kenyan billionaire investor Baloobhai Patel, delivered strong financial results for the full year ended Dec. 31, 2024, with net profit soaring to Ksh29.7 billion ($229.26 million). The growth was driven by solid performance in both net interest and non-interest income.

Profit surges amid revenue growth

According to its earnings update, Absa Kenya’s net profit jumped from Ksh16.4 billion ($126.3 million) in 2023 to Ksh29.7 billion ($229.3 million) in 2024, pushing its return on equity (ROE) to 24.5 percent—highlighting its ability to generate strong returns for shareholders.

Total revenue rose 14.1 percent to Ksh62.3 billion ($481.1 million), up from Ksh54.6 billion ($421.6 million) the previous year. The consumer banking segment contributed 48 percent of revenue, or Ksh29.9 billion ($230.8 million), while wholesale banking accounted for the remaining 52 percent at Ksh32.4 billion ($250.1 million).

Corporate and business banking also posted strong results, with revenue rising 28 percent to Ksh14.3 billion ($110.52 million) and 19 percent to Ksh11.8 billion ($91.19 million), respectively. These gains reflect the bank’s diversified revenue streams.

Growth in interest and non-interest income offsets loan decline

Net interest income grew 15.4 percent to Ksh46.2 billion ($357.03 million), supported by a 19.3 percent jump in gross interest income. This was largely driven by a 20.6 percent rise in loan income and a modest 2.3 percent increase in earnings from government securities.

Non-interest income expanded by 10.8 percent to Ksh16.1 billion ($124.44 million), benefiting from strong performance in payments, lending, asset management, and brokerage services. However, an 8.8 percent drop in loan fees and a 7.1 percent decline in forex income slightly offset this growth.

Despite a 7.9 percent contraction in the loan book, customer deposits edged up 1.2 percent to Ksh309.1 billion ($2.39 billion), reflecting steady deposit mobilization and growth in retail banking. However, total assets declined from Ksh520 billion ($4.02 billion) in 2023 to Ksh506 billion ($3.91 billion), signaling potential challenges in asset expansion.

Patel’s stake and higher dividend payout

Absa Kenya, a subsidiary of South Africa’s Absa Group, operates 86 branches across the country. Billionaire investor Baloobhai Patel holds a 1.03 percent stake in the lender, reinforcing his position among Kenya’s wealthiest investors.

While Absa Kenya faced margin pressure, declining forex income, and a shrinking loan book, its digital expansion and cost-efficiency initiatives helped sustain long-term profitability. The bank also increased its final dividend to Ksh1.55 ($0.012) per share, bringing the total annual payout to Ksh1.75 ($0.014), up from Ksh1.55 the previous year.