NBK bounces back to record Ksh.106 million net profit
Published on: May 30, 2019 08:30 (EAT)
The National Bank of Kenya (NBK) has announced a Ksh.106.3 million net profit for the period ending March 31, 2019 to effectively end a 15-month dip in performance. The lender rebounded from a Ksh.278.5 million loss over the preceding quarter in 2017 from an effective increase in interest funded income and a hold in the growth of Non-Performing Loans (NPLs) “This is in line with our strategy of improving our net interest margin by lowering the cost of funding and accelerating recoveries and remediation of the NPL book,” said NBK Managing Director and CEO Wilfred Musau. NBK’s total interest income was up by 20 percent over the quarter on an account of increased lending as the bank pushed a further Ksh.455 million through its client loan book and government securities respectively in the first three months of the year. The lender’s total non-performing loans and advances meanwhile held ground at Ksh.27 billion to mirror on the bank’s ongoing efforts to recover outstanding balances from clients. NBK, however, saw its operating expenses surge by a further 23.5 percent over the quarter to Ksh.2.1 billion in a factor attributable to a sharp rise in asset devaluation. Further, a significant drop in the lender’s fee and commission revenue stream saw its non-interest funded income sink by 9.2 percent to Ksh.501.7 million. The bank, which remains under the subject of an impending acquisition by KCB, had seen its full year earnings to December 31, 2018 eaten away to a mere Ksh.7 million as restructuring costs and increased loan impairment crippled growth. NBK had earlier in March issued a precautionary statement warning of a substantial decline in profit. The proposed acquisition which still awaits shareholder and regulatory approval to include an inquiry by parliament is expected to see NBK operate as a KCB subsidiary in the short run before its incorporation to the acquirer. NBK shareholders are expected to part with 10 shares for each of the acquirer’s shares in a transaction that now has the blessing of KCB Group shareholders.