Absa Bank Kenya PLC in its H1 financials saw an improvement in the asset quality, when gross non-performing loans fell 17.8 percent to Ksh.36.36 billion from Ksh.44.24 billion a year earlier.
This pushed the gross NPL ratio down to 10.1 percent from 13.0 percent.
Loan-loss provisions eased 4.1 percent to Ksh.3.08 billion for the six months ended June 30, 2026, as the lender pointed to improving portfolio quality alongside maintained coverage levels.
The cleaner book came even as the bank’s net loan portfolio surged to a record Ksh.329.87 billion from Ksh.304.94 billion in June 2025, surpassing the previous June peak of Ksh.317.95 billion set in 2023.
The loan book stood at Ksh.303.84 billion as recently as March, meaning the lender added roughly Ksh26 billion in lending during the second quarter alone, an 8.2 percent rebound after nearly three years of stagnation.
Despite the stronger lending momentum, profit after tax fell 9.8 percent to Ksh.10.53 billion, while profit before tax dropped 15.8 percent to Ksh14.15 billion from Ksh.16.80 billion the prior year.
Total operating income declined 6.8 percent to Ksh.29.33 billion, and net interest income fell 5.4 percent to Ksh21.14 billion, with non-interest income contributing Ksh.8.2 billion.
Total interest income slid 8.5 percent to Ksh.27.37 billion, though this was partly cushioned by a 17.7 percent reduction in interest expense to Ksh.6.23 billion as the bank lowered funding costs and grew its transactional deposit base.
Absa Bank Kenya PLC Interim Managing Director and CEO, Yusuf Omari attributed the earnings pressure to falling interest rates, which compressed asset yields faster than funding costs could adjust.
“While the dynamic operating environment exerted pressure on performance, the Bank recorded strong momentum in the second quarter. This reflects our disciplined execution, continued support for customers through relevant financial and non-financial solutions, and ongoing investment in the long-term resilience and sustainability of the business,” said Omari.
The bank posted a market-leading return on equity of 21.7 percent for the period. with customer deposits jumping to Ksh.380.7 billion and total assets grew to Ksh558.1 billion
Income from subsidiaries, spanning asset management, custody services and bancassurance, rose 20 percent year on year, a gain Absa credited to its ongoing revenue diversification strategy.
Absa has since raised its interim dividend 150 percent to a record Ksh.0.50 per share, up from Ksh.0.20, payable on October 15 to shareholders on record as of September 18.
The bank is now targeting further credit expansion through mortgages, small businesses and asset finance.
