Absa Financial institution Kenya, one of many nation’s largest banks by property, elevated its holdings of presidency securities by 19% in 2025 as weak mortgage demand pushed banks to channel extra funds into state debt whereas digital earnings supported earnings.
Investments in authorities securities rose to KES 115.1 billion ($890 million) within the yr ended December 2025, whereas buyer loans grew simply 1% to KES 312.2 billion ($2.41 billion), in accordance with the financial institution’s investor presentation shared on Wednesday.
Revenue after tax climbed 10% to KES 22.9 billion ($177 million) at the same time as lending remained subdued.
The outcomes present how Kenyan lenders are leaning on authorities paper and payment earnings as family and enterprise borrowing stays comfortable, reflecting weak credit score demand throughout the non-public sector.
Internet curiosity earnings, which primarily comes from loans, fell 6% to KES 43.3 billion ($335 million). Non-interest earnings rose 12% to KES 18.1 billion ($140 million), helped by funds, buying and selling, and different transaction-based companies.
These shifts present the rising function of digital banking in supporting financial institution revenues. About 94% of Absa’s transactions now happen by various channels reminiscent of cellular and on-line platforms, in accordance with the investor presentation.
The financial institution has expanded digital lending by its Timiza cellular platform and elevated service provider funds exercise by merchandise reminiscent of Lipa na Absa, a part of a push to develop transaction earnings.
Non-funded earnings accounted for about 29% of whole earnings in 2025, up from 26% a yr earlier.
The lender additionally improved the standard of its mortgage e-book. Mortgage impairment fees dropped 32% to KES 6.2 billion ($48 million) throughout the yr.
Decrease credit score losses and better payment earnings helped offset strain on curiosity earnings and supported general profitability.
Kenyan banks have been navigating a interval of cautious credit score demand as households face strain on disposable earnings and companies stay selective about borrowing.
Authorities securities provide lenders a predictable return and decrease danger than private-sector lending, making them a gorgeous choice as banks increase digital companies that generate transaction charges.
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