Absa Bank which froze dividends in 2019 has said it would resume the payout for the full year in what signals a good year for shareholders in the banking sector.
Absa had paid a dividend of Ksh.1.10 per share amounting to Ksh.5.97 billion for the 2019 performance but withheld payout from last year results due to coronavirus disruptions.
“We are confident to resume dividend payment for the financial year 2021,” said Absa Bank Kenya managing director Jeremy Awori.
Awori also said that the bank’s outlook on their side was “positive and with the improved efficiency levels and returns, the bank aims to accelerate re-investments for growth to gain market share,”
In its financial results for the year ended September 30, 2021, Absa Bank Kenya’s net profit rose by four folds to Ksh.8.24 billion, on the back of increased income and reduced costs.
The latest net profit is 4.3 times more than the Ksh.1.92 billion that the lender posted in a similar period last year.
The earnings were above the net profit Ksh.4.16 billion posted in full-year ended December 2020 and the full pre-pandemic earnings of Ksh.7.47 billion in 2019.
During the review period, Absa’s interest income rose from Ksh.17.1 billion to Ksh.18.57 billion while non-interest income grew from Ksh.8.31 billion to Ksh.8.74 billion. Operating expenses fell by 23 percent or Ksh.4.63 billion to Ksh.15.45 billion, taking pressure off the bottom line.
This was helped by a 55 percent fall in provisions for loan defaults from Ksh.7.6 billion to Ksh.3.4 billion in appreciation of the improving economic environment.
“We are seeing early signs of recovery and we’ve been working closely with our customers and other stakeholders to keep turning the wheels of our economy,” said Awori.
Other banks that have declared the return of dividend payout on the back of recovering performance are KCB Group, Standard Chartered Bank and Stanbic Holdings.