Customer deposits grow to KShs. 92billion; loans and advances rise by 3%
National Bank of Kenya (NBK) has posted KShs. 155million in profit after tax for the first quarter of 2020 ending March, representing a 134% increase a similar period last year.
The performance from KShs. 66million previous year was driven by a growth in the loan book and cost management initiatives.
Managing Director, Paul Russo said: “We have made significant gains in turning around the business. Our recovery momentum has however been slowed down by the disruption of global economies by the COVID-19 pandemic, but we are continually innovating to mitigate its impact on the business”.
The Bank’s total operating income for the quarter grew by 6.7% to KShs. 2.3billion, driven by increased interest income and fees and commissions.
Operating costs remained relatively flat on prudent cost management, absorbing further investments in new branches, digital channels and systems for operational efficiency.
During the quarter, the Bank’s balance sheet strengthened, to stand at KShs.113.8billion. Customer deposits grew to KShs. 92billion, compared to KShs. 89.5billion in Q1 2019. Loans and advances also increased by KShs. 1.9billion to KShs 47.8billion, with the boost in operations from the KShs. 5billion capital injection from KCB Group Plc.
The financial results indicate a strong recovery by the bank, following its acquisition by KCB Group Plc in September 2019. The Non-Performing Loan (NPL) book shrank by 20% for the period ending March 31, 2020. The bank’s total NPL stock stood at KShs. 25.1billion, compared to KShs. 31.5billion last year.
Core capital improved significantly, following injection of new capital from KCB Group Plc. While this has boosted capital ratios, they still remain marginally below regulatory requirements. This is set to be addressed through organic capital growth and support from the shareholder.
The bank’s liquidity position improved to 45.7 per cent, compared to 40.4 per cent the previous year.
Mr Russo said: “We remain optimistic about the long-term future and sustainability of the bank. The main priority for us now is cushioning our customers from the effects of the COVID-19 pandemic while pursuing innovations across offerings, revamping our digital channels and exploring strategic partnerships”.
Following the pandemic, NBK has taken measures to cushion customers from its negative impacts. This includes restructuring customer loans, in addition to suspending listing on the credit reference bureau and waiver of fees charged on use of digital channels.
About National Bank of Kenya
National Bank of Kenya is a fully-fledged Commercial Bank and is a subsidiary of KCB Group Plc. Established in 1968 to boost Kenyans’ access to finance, it has grown to be one of the largest commercial banks in the country with a growing network of 85 branch outlets across the country, over 1500 ATMs and electronic channels of Mobile and Internet Banking. In September 2019, the Bank became a subsidiary of KCB Group Plc following a successful acquisition. National Bank participates in Corporate Banking, Business Banking, Retail Banking and Islamic Banking with an extensive portfolio of products and financial solutions tailored for the requirements of a broad spectrum of customer segments it serves. For more information, please contact: www.nationalbank.co.ke.
In case of any queries/clarification, please contact Judith Sidi Odhiambo – KCB Group Head of Corporate & Regulatory Affairs; email: firstname.lastname@example.org.