NAIROBI, Kenya, May 25 – National Bank of Kenya on Monday announced a nine percent increase in pretax profit for the first quarter ended March 31, 2009.
The Bank’s Managing Director Reuben Marambi said pretax profits increased to Sh438 million compared to Sh403 million over the same period last year.
“The first quarter results we are releasing today are modest. But this is expected especially due to the current national and global economic circumstances,” he said.
Total non interest income went up to Sh505 million from Sh414 million while the total operating income increased by 13 percent to Sh1.3 billion.
Total operating expenses rose as well from Sh754 million to Sh875 million due to the bank’s continuing branch refurbishment and cautionary expansion of service delivery.
Mr Marambii said: “The bank will continue with its cautionary expansion programme and refurbishment of the existing branch network to widen and improve service delivery.”
No dividend was declared which was no surprise as the bank has not given any dividend payouts for more than seven years.
National Bank is one of the quasi-owned government institutions that have been earmarked for privatisation and the government has already picked two advisers for the transactions. The other company targeted is the Kenya Wine Agencies.
At the same time, Standard Chartered Bank has recorded a 14 percent increase in pre-tax profit for the first quarter of this year.
The bank’s pre-tax profits for the first three months rose to Sh1.494 billion compared to Sh1.315 billion for the same period last year.
Commenting on the results, the bank’s Chief Executive Officer Richard Etemesi said the growth was as a result of strategic investments made last year that positioned the bank for growth.
“Last year, we focused on investing on the business in order to position the bank for growth. We invested in our people, products and infrastructure, and the growth we have recorded in this first quarter is a reflection of our relentless focus on the basics of banking,” he said.
Mr Etemesi said that the growth reflected the benefits of sticking to a clear and consistent strategy – of investing for growth; of disciplined management of capital, liquidity, costs and risks.
“We have had a great start to the year despite a slow economic environment. Our consumer banking business saw tremendous growth while our Wholesale Banking business reported good results,” said the CEO.
The Bank’s Consumer Banking business delivered double digit income growth with revenues up 12 percent. In the first three months, the bank has introduced several products in the market through the retail products and wealth management business as well as diversifying its delivery channels through the introduction of mobile banking and the addition of one more branch in Upper Hill.
Wholesale Banking performed well in the first quarter reflecting the breadth and diversity of the business. In the first quarter, revenue was up 5 per cent compared to the same period in 2008.
“We are cautiously optimistic about the second quarter,” Mr Etemesi said of their outlook.
