ABSA Group released their Q3’22 earnings results posting a 29.61% & 30.07% climb in EPS & PAT respectively to KES 1.97/share and KES 10.71Bn respectively driven by a 25.30% increase in net interest income and a 16.44% growth in non-interest income. Trailing ROaE & ROaA improved to 11.56% & 1.49% respectively in 3Q22.NIMs remained adequate at 7.09% while the profit margin edged up 638bps q/q to 32.03% in 3Q22. Factoring in the growth from previous quarters, we foresee the lender closing the year with a PAT of between KES 11.00Bn – 14.00Bn.
Loan book grew 26.35% y/y to KES 289.45Bn faster than the 4.55% y/y growth in the customer deposits to KES 281.06Bn leading to a 20.84% growth in the loan deposit ratio to 102.98% and despite a minimal need of 20%, its liquidity ratio is 25.8%, indicating a rising liquidity risk. Allocation to government securities grew 10.43% y/y to 139.83Bn in 3Q22. Fair Value change is a percentage of government securities was 2.24% Q3’22 vs 0.25% recorded in Q3’21.
