Absa Net Profits Up 169% To Sh110 Billion In 2021

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Absa has reported a 169% jump in net profits after tax to sh110 on the back of growth in revenues and a significant reduction in business costs.

While addressing journalists in Kampala, Absa managing director Mumba Kalifugwa noted that the bank’s performance for the year ended demonstrates resilience amid a tough operating environment.  

“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 Covid-19 containment measures,” he said.

Total revenues grew 15.4% to sh365b attributed to sustained customer deposit performance throughout the year, coupled with market liquidity.

Absa chief financial officer Michael Segwaya noted that the bank eased lending significantly to customers as a result of uncertainty brought by the pandemic.

The bank’s loan book grew marginally to sh1.3 trillion, representing a 0.1 growth rate compared to 2020.

“Our net customer assets stand at sh1.308 trillion, marginally up by 0.1% which can be attributed to weak credit demand caused by the adverse effects of the pandemic.

“Considering the full reopening of the economy and projected economic growth of 5.5% for 2022, we expect a rebound in business activity across all sectors and anticipate that we will lend more to the private sector,” Segwaya said.

Deposits grew by 2.7% to 2.421 trillion. Total costs remained flat year-on-year as a result of improved cost management and reduction in brand separation costs.

The bank’s cost to income ratio improved to 58% in 2021 from 67%, representing improvement by management to manage costs to run the business.

“The fact that the ratio is going down means we are being more efficient. The investment we made in the brand is now paying off,” Segwaya said.

Going forward, officials remain “cautiously optimistic” of the outlook for 2022 in the face of higher inflation and geo-politics happening in the global community.   

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