NAIROBI, Kenya, Sep 17 – An analysis of bank results in the first half of 2024 reveals that Kenyan consumers are choosing to save money rather than spend it or invest, highlighting deposit growth.
Absa Bank Kenya Managing Director and CEO Abdi Mohamed said the lender’s deposit grew by 6 percent to Sh353.3 billion in the six months to June 2024, indicating customers confidence in the Pan-African brand.
He said the bank sees a role in easing back money into the economy, especially as the Central Bank of Kenya begins to lower interest rates and consumption picks up on declining inflation.
“We have seen a depressed consumer spending, but overall, the picture is mixed, with a lot of positives for the economy,” Mohamed said during the release of the bank’s half results.
“We see customer numbers continuing to grow with 33 per cent of new customers coming through both legacy and digital channels. We have also seen five times growth of our agency banking outlets and we have seen a double-digit growth in LaRiba and women in business propositions,” he added.
The first half of the year had been set by a tough macro-economic environment, including Eurobond pressure on the country’s currency, high inflation, and high interest rates.
However, after the government fully settled the Eurobond and eased the pressure on the currency, the shilling strengthened 17 percent with a stable flow of foreign currency from multilateral support.
Overall inflation has also trailed downwards from 7 percent in January to 4.3 percent in June, easing pressure on household incomes.
Despite the GenZ protests that brought down business activity in mid-year, Kenya’s businesses tend to pick up in the second half, and Absa sees the bank playing a crucial role in finding the pockets of growth.
“We are playing our role to ensure Kenya’s economy continues to grow, and, together, we can write the next chapter of your story,” Mohamed stated.
He highlighted that businesses face pressure from geopolitical conflicts impacting supply chains and fueling global inflation and high US and EU policy rates limiting access to credit for developing countries.
Despite the complex challenges, he said, businesses should benefit from the current stable currency and resilient economy and strong performance in key sectors.
