The chief executive of Absa Bank Kenya Abdi Mohamed received a 39.7 percent pay rise in the year ended December 2024, taking his total compensation to Sh109.7 million.
This was up from Sh78.5 million a year earlier, with the board rewarding Mr Abdi for a performance that resulted in net income and dividends growing by double digits.
His base salary increased from Sh35.9 million to Sh50.4 million while the cash bonus rose from Sh15.3 million to Sh19.8 million, according to disclosures in the company’s latest annual report.
Mr Abdi also benefitted from growth in other remuneration items, including deferred bonus and retirement benefits funded by the Nairobi Securities Exchange-listed firm.
Absa awarded its chief financial officer Yusuf Omari a total compensation of Sh71.4 million in 2024, down slightly from Sh73.9 million the prior year due to a lower bonus.
Mr Omari’s base salary, however, rose to Sh38.3 million from Sh34 million.
The bank grew its net profit 27.5 percent to Sh20.8 billion last year on the back of higher interest income from loans to customers, leading to a 12.9 percent hike in the total dividend per share to Sh1.75 from Sh1.55 declared for the year to December 2023.
This will see the lender raise its absolute payout to shareholders to Sh9.5 billion from Sh8.4 billion.
Absa is among the banks that gained from higher lending margins, with interest from loans rising by Sh9.1 billion to Sh53.3 billion, despite the loan book shrinking by Sh26.7 billion to Sh309 billion as the company shifted its part of its assets into government debt.
Absa’s latest full year performance has seen its return on equity –the net income measured against shareholders’ funds— rise to a new high of 24.5 percent.
This rate of return grew from 23.7 percent in 2023 and has been rising steadily from lows of 14.1 percent in 2020 when the banking sector’s profitability was hit by major provisions emanating from the impact of the Covid-19 pandemic.
“For the year 2024, we delivered a return on equity of 24.5 percent and the board remains committed to providing returns above industry standards for all stakeholders,” Absa says in the report.
Besides the enhanced dividend, shareholders have also racked up substantial capital gains.
The firm’s stock climbed 56.2 percent last year to close at Sh18.05 and has gained further this year.
Absa has in the past few years sought to grow its retail banking business through a strategy that has featured the rollout of mobile banking, opening more branches and targeting affluent clients.
This contributed to its number of deposit accounts rising to 2.23 million in 2023 from 1.75 million in 2019, according to Central Bank of Kenya (CBK) data.
KCB Group, Equity Group and Co-operative Bank of Kenya have dominated retail banking, giving them access to a relatively cheaper source of funds and more transactions activity.
