Absa’s net profits after tax nearly tripled for the year ended December 2021 to sh110b, representing a 169% growth in profitability from the previous year.
Absa posted sh40b in net profits in 2020. The nearly triple-digit growth was anchored on the reduction of its impairment charge as well as a growth in total revenues by 15% to sh365b.
(L-R) Mumba Kalifungwa, Chief Executive Officer, Absa, Michael Segwaya, Chief Executive Officer, Absa, and Hellen Nangonzi, Marketing and Customer Experience Director, Absa interacting during the announcement. (Photo by Shamim Saad)
“We registered a significant drop in impairment of 77.8% as a result of increased improvement in the construct of our loan book indicating a faster than anticipated recovery from the adverse economic impact of the various pandemic containment measures,” Mumba Kalifungwa, Absa’s managing director said.
In 2020, Absa booked sh60b in impairment costs, which adversely affected its net profits for the year.
Customer deposits grew 2.6% to sh2.7 trillion in 2021, up from sh2.3 trillion in 2020.
Net loans and advances to customers nearly remained flat for the period, only growing 0.1% to sh1.3 trillion.
The slow growth in lending was attributed to uncertainty amid the pandemic on key economic sectors.
“The 0.1% growth can be attributed to weak credit demand caused by the adverse effects of the pandemic. We expect a rebound in business activity across all sectors and anticipate that we will lend more to the private sector,” Micheal Segwaya, chief financial officer at Absa said.
Source: New Vision