ABK Financial Results Q3 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

-