{"id":13490,"date":"2020-08-28T19:14:50","date_gmt":"2020-08-28T19:14:50","guid":{"rendered":"https:\/\/www.africa-press.com\/kenya\/?p=13490"},"modified":"2020-08-28T19:31:17","modified_gmt":"2020-08-28T19:31:17","slug":"absa-banks-half-year-profit-dips-on-bad-loans-provision","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/kenya\/economy\/absa-banks-half-year-profit-dips-on-bad-loans-provision","title":{"rendered":"Absa Bank\u2019s half-year profit dips on bad loans provision"},"content":{"rendered":"<p><strong>Authors:\u00a0Dominic Omondi and Wainaina Wambu\u00a0<\/strong><br \/>\n<strong>AfricaPress-Kenya:<\/strong>\u00a0 Absa Bank\u2019s net profit dropped by almost 90 per cent in the first six months of the year, largely due to a Sh5.4 billion provision for loan defaults by borrowers distressed by the Covid-19 pandemic.<\/p>\n<p>This saw the lender\u2019s profit after tax decline to Sh390 million compared to Sh3.76 billion that it made in the same period last year.\u00a0The performance excluded Sh1.7 billion incurred as the lender transitioned from Barclays Bank, which was concluded early in the year.<\/p>\n<p>Banks have raised their loan loss provisions as borrowers struggle to service their debts owing to the negative impact of the pandemic.<\/p>\n<p>In the first half of 2019, Absa set aside Sh1.6 billion as insurance against possible defaults, but this shot up by more than two times as more borrowers rushed to banks to change the terms of their loans. ?\u00a0Absa Bank Kenya Managing Director Jeremy Awori said the high credit risk had made them triple their loan provisions ahead of future uncertainty.<\/p>\n<p>\u201cThe world is facing one of the most difficult challenges of our lifetime, one which governments, industries, businesses and societies around the world were not sufficiently prepared for and whose full impact is yet to be understood,\u201d he said in the results announcement yesterday.<\/p>\n<p>\u201cAs management, we have taken the decision to increase credit impairment provisions to position ourselves for the uncertain future.\u201d<\/p>\n<ul class=\"list-group readmore my-3\">\n<li style=\"list-style-type: none\"><\/li>\n<\/ul>\n<p>Mr Awori, however, noted that non-performing loans remained unchanged \u201can indication that the significant increase in impairment provisions is related to management overlay on performing loans.\u201d<\/p>\n<p>The lender\u2019s total income for the half year grew by three per cent to Sh16.8 billion.\u00a0Its total assets, which stood at Sh392 billion, rose 11 per cent year-on-year attributed to growth in customer loans, investments in government securities and other liquid assets.<\/p>\n<p>Net customer loans went up eight per cent to close at Sh202 billion, driven by general lending, trade loans, mortgage and scheme loans that recorded strong growth compared to last year.<\/p>\n<p>Interest income grew two per cent to Sh11.26 billion compared to June 2019, attributed to growth in balance sheet and management of cost of funds.\u00a0In the first half of the year, the lender gave up to Sh57 billion loan repayment holidays as it moved to protect livelihoods and businesses affected by Covid-19.<\/p>\n<p>Awori added that the pandemic would see them give priority to capital and liquidity preservation.<\/p>\n<p>\u201cOur focus in the last few months has been to help our customers manage through the pandemic through various interventions such as loan moratoriums and restructures, fee waivers for digital transaction, capacity building for SMEs and other Force for Good initiatives,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Authors:\u00a0Dominic Omondi and Wainaina Wambu\u00a0 AfricaPress-Kenya:\u00a0 Absa Bank\u2019s net profit dropped by almost 90 per cent in the first six months of the year, largely due to a Sh5.4 billion provision for loan defaults by borrowers distressed by the Covid-19 pandemic. This saw the lender\u2019s profit after tax decline to Sh390 million compared to Sh3.76 [&hellip;]<\/p>\n","protected":false},"author":84,"featured_media":13488,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8],"tags":[2883,2763,3688],"class_list":["post-13490","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","tag-absa-bank","tag-covid-19-pandemic","tag-loans"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.1 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Absa Bank\u2019s half-year profit dips on bad loans provision - kenya<\/title>\n<meta name=\"description\" content=\"Absa Bank\u2019s net profit dropped by almost 90 per cent in the first six months of the year, largely due to a Sh5.4 billion provision for loan\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/kenya\/economy\/absa-banks-half-year-profit-dips-on-bad-loans-provision\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Absa Bank\u2019s half-year profit dips on bad loans provision\" \/>\n<meta property=\"og:description\" content=\"Absa Bank\u2019s net profit dropped by almost 90 per cent in the first six months of the year, largely due to a Sh5.4 billion provision for loan\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/kenya\/economy\/absa-banks-half-year-profit-dips-on-bad-loans-provision\" \/>\n<meta property=\"og:site_name\" content=\"kenya\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2020-08-28T19:14:50+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-08-28T19:31:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2020\/08\/absa_banks_halfy5f48251bd70b2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"500\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/economy\/absa-banks-half-year-profit-dips-on-bad-loans-provision#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/economy\/absa-banks-half-year-profit-dips-on-bad-loans-provision\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Absa Bank\u2019s half-year profit dips on bad loans provision\",\"datePublished\":\"2020-08-28T19:14:50+00:00\",\"dateModified\":\"2020-08-28T19:31:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/economy\/absa-banks-half-year-profit-dips-on-bad-loans-provision\"},\"wordCount\":452,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/economy\/absa-banks-half-year-profit-dips-on-bad-loans-provision#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2020\/08\/absa_banks_halfy5f48251bd70b2.jpg\",\"keywords\":[\"Absa Bank\",\"Covid-19 pandemic\",\"Loans\"],\"articleSection\":[\"all news\",\"economy\",\"homepage-english\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/kenya\/economy\/absa-banks-half-year-profit-dips-on-bad-loans-provision#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/economy\/absa-banks-half-year-profit-dips-on-bad-loans-provision\",\"url\":\"https:\/\/www.africa-press.net\/kenya\/economy\/absa-banks-half-year-profit-dips-on-bad-loans-provision\",\"name\":\"Absa Bank\u2019s half-year profit dips on bad loans provision - 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