Absa Bank Kenya : ABK Financial Results Q3 2023

Absa Bank Kenya PLC

The Board of Directors of Absa Bank Kenya PLC is pleased to announce the unaudited group results for the period ended 30 September 2023

				Bank					Group									Bank
		September	December	March	June	September	September	December	March	June	September					September	December	March	June	September
		2022	2022	2023	2023	2023	2022	2022	2023	2023	2023				2022	2022	2023	2023	2023
		Shs '000	Shs '000	Shs '000	Shs '000	Shs '000	Shs '000	Shs '000	Shs '000	Shs '000	Shs '000					Shs '000	Shs '000	Shs '000	Shs '000	Shs '000
I Statement of financial position	Unaudited	Audited	Unaudited	Unaudited	Unaudited	Unaudited	Audited	Unaudited	Unaudited	Unaudited		III Other disclosures			Audited	Audited	Unaudited	Unaudited	Unaudited
A	Assets												1) Non-performing loans and
1 Cash balances (both local and foreign)	8,384,897	11,464,397	13,151,558	8,429,922	9,153,046	8,384,897	11,464,397	13,151,558	8,429,922	9,153,046		advances
2 Balances due from Central Bank of Kenya	12,806,433	12,746,777	13,856,697	13,404,820	19,252,820	12,806,433	12,746,777	13,856,697	13,404,820	19,252,820		a) Gross non-performing loans
3 Kenya Government and other securities												and advances		20,037,451	22,519,244	31,142,698	32,179,930	34,545,952
	held for dealing purposes	47,653,802	42,905,378	47,237,832	35,271,586	28,925,894	47,653,802	42,905,378	47,237,832	35,271,586	28,925,894		b) Less: Interest in suspense	2,579,390	4,794,156	4,521,938	4,648,699	5,403,514
4 Financial assets at fair value through profit and loss	-	-	-	-	-	-	-	-	-	-		c) Total non performing loans
5	Investment Securities:	-	-	-	-	-	-	-	-	-	-		and advances		17,458,061	17,725,088	26,620,760	27,531,231	29,142,438
a) Held to Maturity:	-	-	-	-	1,019,117	-	-	-	-	1,019,117		d) Less: loan loss provisions	13,447,918	13,344,496	15,368,861	17,669,239	17,894,973
	a. Kenya Government securities	-	-	-	-	1,019,117	-	-	-	-	1,019,117		e) Net non performing loans(c-d)	4,010,143	4,380,592	11,251,899	9,861,992	11,247,465
	b. Other securities	-	-	-	-	-	-	-	-	-	-		f) Discounted value of securities	3,100,203	3,257,843	8,891,882	7,700,786	9,093,560
b) Fair value through other comprehensive income												g) Net NPLs (Excess)/Exposure (e-f)	909,940	1,122,749	2,360,017	2,161,206	2,153,905
	(FVOCI)	91,789,513	90,192,869	86,651,020	80,359,746	76,300,609	92,172,299	90,584,670	87,026,795	80,732,814	76,661,241		2) Insider loans and advances
	a. Kenya Government securities	91,789,513	90,192,869	86,651,020	80,359,746	76,300,609	92,172,299	90,584,670	87,026,795	80,732,814	76,661,241		a) Directors ,shareholders and
	b. Other securities	-	-	-	-	-	-	-	-	-	-		associates		33,954	33,034	33,243	58,995	56,624
6 Deposits and balances due from local banking												b) Employees		10,154,072	10,258,378	10,226,224	10,288,808	10,332,001
	Institutions	-	843,225	1,259,224	3,992,100	518,712	-	843,225	1,259,224	3,992,100	518,712		c) Total insider loans and advances	10,188,026	10,291,412	10,259,467	10,347,803	10,388,625
7 Deposits and balances due from banking Institutions												3) Off Balance sheet items
	abroad	1,092,865	4,113,673	4,643,518	2,200,293	452,680	1,092,865	4,113,673	4,643,518	2,200,293	452,680		a) Letters of credit, guarantees,
8	Tax recoverable	162,293	537,355	-	-	-	315,748	747,970	-	-	-		acceptances		50,479,095	57,644,594	49,483,405	54,162,125	47,829,070
9 Loans and advances to customers(net)	289,446,839	283,578,543	309,973,217	317,946,670	330,932,447	289,446,839	283,578,543	309,973,217	317,946,670	330,932,447		b) Forwards, swaps and options	147,647,920	141,534,025	158,956,906	148,689,765	120,242,069
10 Balances due from banking institutions in the group	5,314,427	8,726,287	13,021,919	13,963,927	11,560,293	5,314,427	8,726,287	13,021,919	13,963,927	11,560,293		c) Other contingent liabilities	-	-	-	-	-
11 Investment in Associates	-	-	-	-	-	-	-	-	-	-		d) Total Contingent liabilities	198,127,015	199,178,619	208,440,311	202,851,890	168,071,139
12 Investment in Subsidiary Companies	462,751	462,751	462,751	462,751	462,751	-	-	-	-	-		4) Capital Strength
13 Investment in joint Ventures	-	-	-	-	-	-	-	-	-	-		a) Core capital		52,439,147	55,606,048	57,781,106	57,321,310	58,004,150
14 Investment properties	-	-	-	-	-	-	-	-	-	-		b) Minimum statutory capital	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000
15 Property and equipment	2,520,881	2,674,477	2,516,021	2,510,700	3,012,698	2,520,927	2,675,951	2,517,424	2,507,817	3,009,035		c) Excess/(Deficiency)		51,439,147	54,606,048	56,781,106	56,321,310	57,004,150
16 Prepaid operating rental leases	33,443	32,116	31,855	31,590	31,323	33,443	32,116	31,855	31,590	31,323		d) Supplementary capital		9,103,312	15,505,695	16,646,233	17,659,767	18,618,705
17 Intangible assets	438,692	461,929	467,517	495,653	556,150	496,828	515,795	518,594	548,155	607,668		e) Total capital		61,542,459	71,111,743	74,427,339	74,981,077	76,622,855
18 Deferred Tax	6,219,239	5,834,288	5,956,746	6,876,652	8,254,535	6,276,042	5,924,099	6,053,091	6,981,604	8,340,962		f) Total risk weighted assets	380,172,189	382,149,724	410,913,245	424,761,594	432,191,352
19 Retirement benefit asset	-	-	12,370	3,740	-	-	-	12,370	3,740	-		g) Core capital/total deposit	18.8%
20 Other assets	14,760,917	12,716,483	15,575,575	18,139,057	14,902,509	14,832,851	12,375,056	15,299,990	17,723,948	14,458,861		liabilities		18.4%	18.6%	17.3%	16.5%
21 Total asset	481,086,992	477,290,548	514,817,820	504,089,207	505,335,584	481,347,401	477,233,937	514,604,084	503,738,986	504,924,099		h) Minimum statutory ratio	8.0%	8.0%	8.0%	8.0%	8.0%
													i) Excess/(Deficiency)		10.8%	10.4%	10.6%	9.3%	8.5%
B	Liabilities												j) Core capital/total risk weighted	13.8%
22 Balances due to Central Bank of Kenya	-	-	-	-	-	-	-	-	-	-		assets		14.6%	14.1%	13.5%	13.4%
23 Customers' deposits	283,633,726	306,662,590	314,010,528	336,078,746	358,147,547	281,058,601	303,751,003	310,831,231	332,599,693	354,311,705		k) Minimum statutory ratio	10.5%	10.5%	10.5%	10.5%	10.5%
24 Deposits and balances due to banking institutions												l) Excess/(Deficiency)		3.3%	4.1%	3.6%	3.0%	2.9%
	(local)	7,730,535	8,375,258	9,099,706	9,736,639	13,866,148	7,730,535	8,375,258	9,099,706	9,736,639	13,866,148		m) Total capital/total risk weighted	16.2%				17.7%
25 Deposits and balances due to banking institutions												assets		18.6%	18.1%	17.7%
	(foreign)	1,181,950	642,615	2,264,509	1,627,365	4,216,246	1,181,950	642,615	2,264,509	1,627,365	4,216,246		n) Minimum statutory ratio	14.5%	14.5%	14.5%	14.5%	14.5%
26 Other money market deposits	-	-	-	-	-	-	-	-	-	-		o) Excess/(Deficiency)		1.7%	4.1%	3.6%	3.2%	3.2%
27 Borrowed funds	3,072,477	4,266,919	4,226,962	4,202,591	4,352,177	3,072,477	4,266,919	4,226,962	4,202,591	4,352,177		p) Adjusted Core Capital/Total	18.9%	18.4%	18.7%		-
28 Balances due to banking institutions in the group	101,795,616	76,303,685	96,362,152	68,590,108	40,803,066	101,795,616	76,303,685	96,362,152	68,590,108	40,803,066		Deposit Liabilities*		-
29 Tax payable	-	-	1,392,026	269,486	542,988	-	-	1,268,419	6,963	293,465		q) Adjusted Core Capital/Total Risk	13.9%	14.6%	14.2%		-
30 Dividends payable	1,086,307	-	-	1,086,307	1,086,307	1,086,307	-	-	1,086,307	1,086,307		Weighted Assets*		-
31 Deferred tax liability	-	-	-	-	-	-	-	-	-	-		r) Adjusted Total Capital/Total Risk	16.3%	18.6%	18.2%	-	-
32 Retirement benefit liability	120,119	121,000	-	-	7,675	120,119	121,000	-	-	7,675		Weighted Assets*
33 Other liabilities	24,851,030	20,107,180	22,597,096	22,109,275	20,605,053	25,040,438	20,160,439	22,570,096	22,148,659	20,674,525		5 Liquidity		25.8%	33.6%	28.6%	28.7%	29.8%
34 Total liabilities	423,471,760	416,479,247	449,952,979	443,700,517	443,627,207	421,086,043	413,620,919	446,623,075	439,998,325	439,611,314		a) Liquidity ratio
													b) Minimum statutory ratio	20.0%	20.0%	20.0%	20.0%	20.0%
C	Shareholders' Funds												c) Excess/(Deficiency)		5.8%	13.6%	8.6%	8.7%	9.8%
35 Paid up/Assigned capital	2,715,768	2,715,768	2,715,768	2,715,768	2,715,768	2,715,768	2,715,768	2,715,768	2,715,768	2,715,768
36 Share premium/(discount)	-	-	-	-	-	-	-	-	-	-		Message from the Directors:
37 Revaluation reserves	(942,562)	(1,536,412)	(1,588,960)	(2,011,709)	(4,492,999)	(955,855)	(1,551,380)	(1,614,041)	(2,046,499)	(4,528,791)
38 Retained earnings/(Accumulated losses)	55,685,770	53,163,772	57,291,697	59,513,564	63,260,332	58,345,189	55,980,457	60,432,946	62,900,325	66,900,532		We are pleased to release our third quarter of 2023 results which demonstrate that we are sustaining
39 Statutory loan loss reserve	-	-	-	-	-	-	-	-	-	-
40 Other reserves	156,256	221,907	200,070	171,067	225,276	156,256	221,907	200,070	171,067	225,276		momentum in business performance. The Bank's revenue grew by 20% to Kshs.40.2 billion supported by strong
41 Proposed dividend	-	6,246,266	6,246,266	-	-	-	6,246,266	6,246,266	-	-		growth in balance sheet. In the period under review, customer deposits grew by 26% to Kshs.354 billion while
42 Capital grants	-	-	-	-	-	-	-	-	-	-		customer assets increased by 14% to Kshs.331 billion. The Bank's transformation and diversification agenda has
					61,708,377					65,312,785		resulted in resilience of operations. The Bank's new business lines such as Asset Management, Digital Finance,
43 Total shareholders' funds	57,615,232	60,811,301	64,864,841	60,388,690	60,261,358	63,613,018	67,981,009	63,740,661
44 Minority Interest	-					-	-	-	-	-		Bancassurance, and stock brokerage delivered double-digit growth leading to positive contribution to the Group
45 Total liabilities and total shareholders funds	481,086,992	477,290,548	514,817,820	504,089,207	505,335,584	481,347,401	477,233,937	514,604,084	503,738,986	504,924,099		financials.
II Statement of comprehensive income												Our underlying costs increased by 17% in line with our continued strategic investments. Efficiency levels
1.0 Interest income												(cost-to-income ratio) improved to 38.7% from 39.7% compared to same period last year. Impairment increased
1.1 Loans and advances to customers	21,720,141	30,681,559	9,576,767	20,210,699	31,606,339	21,720,141	30,681,559	9,576,767	20,210,699	31,606,339		by 34% compared to the same period last year in line with our principles of prudence in risk management given
1.2 Government securities	6,943,246	9,375,735	2,406,459	4,692,016	6,994,075	6,981,593	9,420,791	2,417,509	4,714,239	7,027,592		balance sheet growth and tough operating environment.
1.3 Deposits and placements with banking institutions	626,562	750,751	149,196	308,137	508,002	626,562	750,751	149,196	308,137	508,002		The Bank reported a 15% year-on-year growth in profit after tax to Kshs.12.3 billion improving our
1.4 Other interest income	-	-	-	-	-	-	-	-	-	-
1.5 Total interest income	29,289,949	40,808,045	12,132,422	25,210,852	39,108,416	29,328,296	40,853,101	12,143,472	25,233,075	39,141,933		return-on-equity to 25.2%.
2.0 Interest expenses												We are making positive progress in the execution of our strategy focused on building a modern-day consumer
2.1 Customer deposits	5,124,113	7,114,100	2,167,288	4,747,773	8,141,385	5,029,302	6,975,120	2,126,823	4,655,451	7,979,794
2.2 Deposits and placements with banking institutions	942,616	1,448,752	630,876	1,293,038	1,730,552	942,616	1,448,752	630,876	1,293,038	1,730,552		financial services business, becoming a market leader in business banking while building a leading Corporate and
2.3 Other interest expenses	81,597	113,871	30,018	59,932	107,350	81,597	113,871	30,018	59,932	107,350		Investment bank committed to connecting client ecosystems.
2.4 Total interest expenses	6,148,326	8,676,723	2,828,182	6,100,743	9,979,287	6,053,515	8,537,743	2,787,717	6,008,421	9,817,696		We continue to significantly invest towards solutions that are relevant to our customers. In this regard, we
3.0 Net interest income	23,141,623	32,131,322	9,304,240	19,110,109	29,129,129	23,274,781	32,315,358	9,355,755	19,224,654	29,324,237
4.0 Non - interest income												launched Diaspora Banking proposition and have revamped Digital Banking proposition to align to evolving
4.1 Fees and commissions income on loans & advances	1,035,030	1,382,234	329,731	697,669	1,103,301	1,035,030	1,382,234	329,731	697,669	1,103,301		customer needs. We have reaffirmed our commitment to the MSMEs through a KES100 billion funding
4.2 Other fees and commissions	2,599,901	3,524,336	1,074,349	2,138,243	3,199,059	3,526,903	4,790,442	1,571,252	2,985,691	4,425,563		commitment to spur the sectors' development across various value chains over the next three years. In addition,
4.3 Foreign exchange trading income	4,974,745	6,646,031	2,203,917	3,764,153	4,861,275	4,974,744	6,646,029	2,203,915	3,764,150	4,861,262		we have introduced the Wezesha Stock digital platform to avail financing for retailers and distributors as we
4.4 Dividend income	-	-	-	-	-	-	-	-	-	-		continue to provide our SME customers access to both financial and non-financial services to help them navigate
4.5 Other income	649,606	871,842	404,554	700,338	450,521	638,394	853,875	400,077	691,321	437,051		through the tough business environment.
4.6 Total non-interest income	9,259,282	12,424,443	4,012,551	7,300,403	9,614,156	10,175,071	13,672,580	4,504,975	8,138,831	10,827,177		We remain cognizant of the challenges and opportunities presented by our operating environment. Our capital
5.0 Total operating income	32,400,905	44,555,765	13,316,791	26,410,512	38,743,285	33,449,852	45,987,938	13,860,730	27,363,485	40,151,414
6.0 Operating expenses												position is strong, allowing us to support our customers' growth ambitions while responding appropriately to
6.1 Loan loss provision	5,034,025	6,401,737	2,400,869	5,155,341	6,762,306	5,033,995	6,479,523	2,400,944	5,155,422	6,762,356		the external environment. We would like to thank our customers, colleagues, shareholders and all our stakehold-
6.2 Staff costs	7,245,383	10,226,482	2,626,165	5,491,453	8,452,487	7,433,329	10,487,747	2,681,124	5,602,308	8,626,763		ers for their continued support. We remain committed to continue working towards empowering Africa's
6.3 Directors emoluments	166,080	178,713	29,205	87,780	143,985	172,005	187,396	31,510	92,389	151,345		tomorrow, together, one story at a time.
6.4 Rental charge	61,612	113,116	33,938	59,596	100,067	61,612	113,252	34,073	59,799	100,385		The statements of financial position and comprehensive income, as well as the disclosures presented above
6.5 Depreciation on property and equipment	555,000	755,924	209,554	420,051	630,499	555,048	756,025	209,626	420,194	630,698
6.6 Amortisation charges	89,114	116,220	28,544	58,369	90,991	97,482	127,377	31,333	63,947	99,358		have been prepared from the financial records of the bank and its subsidiaries. These published statements and
6.7 Other operating expenses	4,913,346	6,931,142	2,031,727	3,861,362	5,880,907	4,955,732	6,987,304	2,050,194	3,898,186	5,939,952		disclosures are available on the bank's website www.absabank.co.ke and at the institution's head office at Absa
6.8 Total operating expenses	18,064,560	24,723,334	7,360,002	15,133,952	22,061,242	18,309,203	25,138,624	7,438,804	15,292,245	22,310,857		Headquarters, Waiyaki Way, Nairobi. They were approved by the Board on Thursday 23, November 2023 and
7.0 Profit before tax and exceptional items	14,336,345	19,832,431	5,956,789	11,276,560	16,682,043	15,140,649	20,849,314	6,421,926	12,071,240	17,840,557		signed on its behalf by:
8.0 Exceptional items	-	-	-	-	-	-	-	-	-	-
9.0 Profit after exceptional items	14,336,345	19,832,431	5,956,789	11,276,560	16,682,043	15,140,649	20,849,314	6,421,926	12,071,240	17,840,557		Charles Muchene	Abdi Mohammed	Yusuf Omari
10 Current tax	(5,111,619)	(6,255,473)	(1,929,381)	(4,383,550)	(6,358,929)	(5,356,119)	(6,576,739)	(2,072,159)	(4,614,801)	(6,681,634)
	Chairman	Managing Director	Chief Financial Officer
11 Deferred tax	926,737	290,928	100,516	842,090	1,158,755	928,952	314,591	102,720	848,737	1,146,462
12 Profit after tax and exceptional items	10,151,463	13,867,886	4,127,924	7,735,100	11,481,869	10,713,482	14,587,166	4,452,487	8,305,176	12,305,385
13 Other comprehensive income
13.1 Gains/(Losses) from translating the financial
	statements of foreign operations	-	-	-	-	-	-	-	-	-	-
13.2 Fair value changes in FVOCI financial assets	(2,050,582)	(2,897,985)	(73,140)	(667,581)	(4,204,972)	(2,066,594)	(2,916,370)	(87,575)	(695,896)	(4,234,673)
13.3 Revaluation surplus on property,plant and equipment	-	-	-	-	-	-	-	-	-	-
13.4 Share of other comprehensive income of associates	-	-	-	-	-	-	-	-	-	-
13.5 Income tax relating to components of other
	comprehensive income	615,175	869,396	21,942	200,274	1,261,492	619,978	874,911	26,272	208,769	1,270,402
14 Other comprehensive income for the year net of tax	(1,435,407)	(2,028,589)	(51,198)	(467,307)	(2,943,480)	(1,446,616)	(2,041,459)	(61,303)	(487,127)	(2,964,271)
15 Total comprehensive income for the year	8,716,056	11,839,297	4,076,726	7,267,793	8,538,389	9,266,866	12,545,707	4,391,184	7,818,049	9,341,114
Earnings per Share (Shs)	1.87	2.55	0.76	1.42	2.11	1.97	2.69	0.82	1.53	2.27
Dividends per share (Shs)	-	1.35	-	0.20	-	-	1.35	-	0.20	-

Absa Bank Kenya PLC is regulated by the Central Bank Of Kenya.