National Bank’s posts Ksh. 2.43 billion profits in full year results
Wednesday February 4th 2015
National Bank has recorded a profit before tax of Ksh. 2.43 billion, 34 percent up from the Ksh. 1.81 billion posted in the same period last year. National Bank’s Managing Director and Chief Executive Officer Munir Sheikh Ahmed made this announcement while releasing the results in Nairobi. He attributed the growth to improved revenues from balance sheet growth, cost management and better management of credit risk. Mr. Ahmed added that the good results were a testimony that the Bank’s five year transformation agenda that began in March 2013 is strongly on course.
Total operating income grew by 17% to Ksh. 9.93 billion from Ksh. 8.50 billion in 2013. Interest income grew by 31% to Ksh. 10.70 billion from Ksh. 8.17 billion. This was mainly due to a marked increase in market share in loans and advances. During the same period total operating expenses increased marginally by 9% from Ksh. 6.40 billion in 2013 to Ksh. 6.98 billion. He noted that the Bank increased its lending to customers by Ksh. 26.07 billion which translates to a 66% growth.
Customer deposits also grew from Ksh. 77.99 billion to Ksh. 104.73 billion a 34% increase. The Bank’s total assets increased by 33 per cent to Ksh. 123.09 billion in 2014 from Ksh. 92.56 billion as at 31 Dec 2013. The Managing Director said that he was happy with the positive results adding that the Bank was fully on course in achieving its transformation targets; attaining a CAGR of 45% trading profit over the two year period in the transformation program.
The results released today were some of the benefits of the Bank’s realignment to the program. He said that the notable achievements under the transformation program include a customer focused structure, new strategic business units and customer segments with enhanced customer service. These include; Corporate and Institutional Banking, Treasury, Retail, Business Banking, Micro finance, Islamic banking, Chinese business segment, and Digital banking. He added that as a result the bank had in the period under review, diversified its revenue streams and acquired new corporate and SME customers, which helped increase its market share in the corporate and SME market segments.
The Bank was named one of the fastest growing SME portfolio in the 2014 Banking Awards. 2 Since 2013 the bank has built one of the biggest Islamic banking portfolios, through the National Amanah Banking Division. Six branches in Eastleigh, Wajir, Bondeni, Garissa, Mandera, and Isiolo have been opened to cater primarily for shariah banking clients, in addition to the conventional banking products.
“In order to aggressively grow the business, we have tailored Customer Value Propositions (CVPs) for different customer segments, implemented a robust Sales Model and Product innovation. This includes a total of 260 Direct Sales Representatives (DSRs), 50 Relationship Managers (RMs) who engage our customers on a daily basis”, added Ahmed.
The Bank is constantly growing the Multi-channel distribution network that now stands at 76 branches of which 26 were setup in last 2 years; 124 ATMs of which 40 are offsite and were set up in the last 2 years. The Bank also has strategic partnerships that provide customers with 1700 Agencies and an alliance network of 2500 ATMs. In order to enhance our efficiencies and productivity, the bank centralized credit processes, account on boarding and back offices in branches to Head office.
This has led to the standardization and automation of processes and service delivery that has helped achieve faster TAT on account activation and improved credit application processing from weeks to hours, while at the same time eliminating resource duplications and underutilization.
In a bid to manage down costs and strengthen risk management capability, the bank outsourced noncore activities, reduced headcount, centralized credit processes and introduced Credit Risk, Operational Risk and Market Risk Governance structures as well as policy and procedure frameworks to manage these risks.
The Managing Director also announced that the 46th Annual General Meeting of the shareholders will be held on Friday 27th March 2015 at the Safari park hotel.