NIC moves huge profit

November 13, 2008
Shares

, November 13, 2008 – NIC Bank has posted a pre-tax profit of Sh1.05 billion for the nine months ended September 2008, representing a growth of 43 percent compared to the Shs 733 million reported for the same period last year. The profit after tax was Sh735 million.

The bank’s Managing Director James Macharia attributed the sustained growth in profitability over the years to strong financial and operational performance premised on customer centric business strategies.

“These results have been achieved despite the ongoing strain on global financial markets, post-election upheavals and increased inflationary pressure, all with an adverse bearing on the Kenyan economy,” said Mr Macharia.

Notably, the results for the nine months equal that achieved in 2007 full financial year. The bank’s total operating income rose by 29 percent [an increase of Sh507 million on the back of improved non-funded income which grew by Sh246 million (or 45 percent) and net interest income which grew by 22 percent [an increase of Sh261 million].

Mr Macharia further indicated that foreign currency trading income had increased by a significant 80 percent relative to 2007. The increased non-funded income contribution to the bottom line reflects the Bank’s continued success towards a sustained mitigation of the overall balance sheet risk.

“We consider the results a reciprocation of goodwill by our customers across the board and of the significant progress made over the years by being flexible to their needs.” He also added that the launch of NIC Online, the technologically robust internet banking delivery channel, has proved to be popular with customers.

Operating expenses outside provisions for loan losses grew by a modest Sh135 million (or 15 percent) in spite of the high inflation (at 28 percent) and a year on year balance sheet expansion of 29 percent [an increase of Sh9 billion].

The bank’s loan book recorded a growth of Sh9.0 billion (44 percent) to Sh 29.3 billion by September 2008 underlying the bank’s expanding market share and its capacity for bigger deals. To fund this growth in advances, NIC’s deposit base as at September 2008 stood at Sh32.1 billion, reflecting a 25 percent increase over that reported in June 2007. 

NIC has recently embarked on a comprehensive rebranding process, thus refreshing its image and launching new products. Mr Macharia explained that the re-branding was in line with the evolution in business strategy that the Bank has seen in the last one year.

“Our new logo brand underpins our futuristic outlook and the focus on diversity,” he commented.

Elaborating on the progress made on the other subsidiaries, and in particular NIC Capital Securities, Mr Macharia expressed optimism on their contribution to the Group’s bottom line.

“With all our subsidiaries adequately capitalised and by adopting strong corporate governance ethos that have driven NIC Bank for nearly half a century, we are positive that our subsidiaries will contribute significantly to the bottom line beginning next year,” he said. 

NIC Bank, through its subsidiary NIC Capital, acquired in January 2008 a majority stake in Solid Investments Ltd which was later restructured and re-branded as NIC Capital Securities.

“This, together with our Bancassurance offering, means that we are effectively a ‘One Stop Shop’ for our customers and have the capacity to offer a wide variety of financial solutions to suit all our customers’ needs” said Mr Macharia.

Commenting on the recent turmoil in the global financial markets, Mr Macharia confirmed that NIC Bank has not been adversely affected but continues to monitor closely developments in the international markets.

Shares

Latest Articles

Stock Market

Most Viewed