The lenders tightened funding and operating costs Collage: Absa Bank Kenya interim managing director and CEO Yusuf Omari and Family Bank CEO Nancy Njau. The banking sector has maintained strong earnings growth despite easing interest-rate environment, with listed lenders riding on cost cutting to drive profitability.
Absa Bank Kenya and Family Bank Group reported higher profits in the first half of 2026 on the back of balance-sheet expansion, lower funding costs and tighter cost management. The lenders tightened funding and operating costs with Absa Bank Kenya cutting its interest expense by 18 per cent to Sh6.2 billion in the first half of 2026, supported by growth in lower-cost transactional deposits.
This saw the lender post a profit after tax of Sh10.5 billion in the first half of the year. The lender also kept operating expenses at Sh12.1 billion, describing the spending as disciplined investment in customer-focused transformation and digital innovation. Its impairment charges fell by 4 percent to Sh3.1 billion, pointing to improved credit-risk management.
Absa Bank Kenya Interim managing director and CEO Yusuf Omari said despite a challenging operating environment, the Bank recorded strong second-quarter momentum, driven by disciplined execution, customer support and continued investment in long-term resilience.
“We are driving diversified growth through sector specialisation, strengthening capabilities in priority sectors, and pursuing operational excellence while unlocking new growth opportunities across our businesses,” added said Omari. Absa’s total revenue declined slightly to Sh29.3 billion, reflecting the impact of lower interest rates and the bank’s decision to pass some of the benefits of cheaper funding to customers.
However, the lender maintained a strong 21.7 percent return on equity.