Absa Bank Kenya’s net profit fell by 9.8 per cent to Sh10.53 billion in the six months ended June 2026 as lower interest income outweighed a reduction in funding costs.
The lender’s profit after tax declined from Sh11.68 billion posted in a similar period last year.
Net interest income fell 5.4 per cent to Sh21.14 billion from Sh22.34 billion as income from loans and investments fell faster than funding costs
Total interest income fell to Sh27.37 billion from Sh29.91 billion, while interest expenses declined to Sh6.23 billion from Sh7.57 billion.
Absa said it continued to focus on funding cost management to cushion the impact of lower asset yields.
The bank said: “Revenue closed at Sh29.3 billion, slightly lower than last year, reflecting the impact of the operating environment. This was, however, substantially cushioned by deliberate funding cost management, with interest expense reducing by 18% to Sh6.2 billion.”
Non-interest income was also weaker, falling 10.2 per cent to Sh8.19 billion from Sh9.12 billion due to 28 per cent drop in foreign exchange income to Sh2.26 billion, from Sh3.12 billion a year earlier.
Operating expenses increased 5.7 per cent to Sh12.1 billion from Sh11.44 billion.
The increase in costs was partly offset by lower loan-loss provisions, which fell to Sh3.08 billion from Sh3.21 billion, reflecting the improved quality of the bank’s lending portfolio.
The bank also recorded an improvement in asset quality, with gross non-performing loans falling to Sh36.4 billion from Sh42.2 billion a year earlier.
The weaker earnings came despite continued growth in the bank’s lending business. Customer loans and advances increased to Sh329.9 billion at the end of June 2026, from Sh304.6 billion a year earlier.
Customer deposits increased to Sh380.7 billion from Sh361.3 billion, while total assets increased to Sh558.1 billion from Sh531.6 billion.
Despite the decline in earnings, Absa raised its interim dividend to Sh0.50 per share, from Sh0.20 a year earlier, to be paid on October 15, 2026 to shareholders on record as of September 18, 2026.
❗ Important Notice ❗ Absa Bank Kenya Plc – Unaudited Group Results for the Period Ended 30 June 2026.
