Absa Group, which is going through a turnaround process, posted a 6 percent growth in revenue to 80 billion rands (KSh500.5 billion) in a normalized basis, in the financial year that ended on 31st Decemeber 2019.
The lender’s headline earnings increased by 1 percent to 16.3 billion rands (KSh102 billion) in the period under review. The weak growth in headline earnings is attributed to a slowdown in the South African economy, its largest market.
Absa’s net interest income went up by 6 per cent to 46.5 billion rand (KSh290 billion) compared to 43.8 billion rand (KSh273 billion) recorded at the end of 2018. Non-interest income grew by 3 percent to 33.6 billion rand (KSh209 billion).
It’s operating expenses jumped by 4 per cent to 48.8 billion rand (KSh304 billion) in the year under review.
The bank is undergoing a separation from Barclays Bank Plc, one of the largest in Africa’s banking sector in terms of complexity and size. The process is expected to be finalized by June 2020.
Absa is working on growing its African business particularly in markets outside of South Africa. South Africa’s economy is experiencing sluggish growth which has negatively affected the banks’ earnings.
Absa lists Kenya as one of its two largest markets outside of South Africa. The lender completed a rebranding exercise that saw the Kenyan subsidiary change its name from Barclays Bank Kenya Limited to Absa Bank Kenya Plc.
The lender revealed plans to start an asset management business in Kenya, as part of its revenue expansion strategy. This will be an addition to its retail banking, corporate investment banking, insurance businesses.
