Absa Bank’s profit has fallen to Kshs 1.9 billion. This is a 65% percent from the previous year’s net profit of Kshs 5.6 billion in the same period.
Increase loan provision accounts for this sharp fall. There has been an increase in loan defaults due to the economic effects of the COVID-19 pandemic.
The loan provisions were initially at Kshs 3.1 billion, but they have increased the figure to Kshs 7.6 billion – a 146% increase.
To lessen the financial burden for their economically straining customers, the lender has restructured 30% of the bank loans allowing the customers to repay loans at favorable terms. Also, they have offered loan relief to some of their customers.
As of September 2020, the lender’s nonperforming loans are at 14.3 billion, increasing from Kshs 11 billion in the previous year. The net interest income rose to Kshs 17.1 billion, a 1.6% increase, while non-interest income increased to 14.3 billion, a 4.5% increase.
Notably, there has been a significant increase in customer deposits to Kshs 246.6 billion, a 4.7% increase. Also, the bank has reported a 7.8% increase in the loans issued to customers amounting to Kshs 209.2 billion.
The bank has also reported a remarkable increase in total assets to Kshs 387.9 billion, a 7.8% increase. The bank’s total liabilities have increased to Kshs 343.2 billion, an 8.7% increase