Profits rise for Kenyan bank

May 6, 2010
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, NAIROBI, Kenya, May 6  – NIC Bank Group has reported a 42 percent increase in its profit before tax to Sh529 million from Sh372m reported in the previous year.

Announcing the financial results on Thursday, the Group Managing Director James Macharia attributed the improved performance to the enhanced economic environment and the bank’s strategy in its key market segments.

In turn, and in response to the need to support both the Government and Central Bank of Kenya’s initiatives in stimulating economic growth, the bank recently announced a reduction in its base and effective lending rates.

During the quarter, total operating income grew by 30 percent to Sh1.1b, an increase of Sh254m compared to the same period last year, with non-funded income increasing by 41 percent to Sh459m against the Sh325m reported in Quarter 1, 2009.

“In line with our One-Stop-Shop concept, the bank recorded growth across all business lines with a significant increase in non-funded income, thus further lowering the underlying balance sheet risk,” said Mr Macharia.

Operating expenses outside loan impairment charges increased by Sh96m. This was underpinned by regional and branch expansion initiatives including the recent upgrades of branches in Mombasa and Nairobi and the recently opened branches in Kisumu, Thika and Meru.

Together with the Nakuru Branch, this has ensured that the Bank has a nationwide footprint and is therefore better able to take advantage of the growing business segments in these markets.

Last year, the bank also acquired a 51 percent equity stake in Savings & Finance Commercial Bank which has operations in Dar es Salaam, Mwanza and Arusha. This Tanzanian arm of the business is expected to significantly contribute to NIC Bank Group’s bottom line this year.

“The Tanzanian market offers good growth potential for the group and will facilitate improved service delivery to our customers who are already operating regionally,” noted Mr Macharia.

Total assets recorded a growth of 10 percent to Sh52b from the Sh48b recorded in December 2009, with the bank’s deposit base increasing by 22 percent to close the period at Sh44b.

The bank’s shareholders will hold their 50th Annual General Meeting on May 12 at the Kenyatta International Conference Centre Nairobi. 

An interim dividend of Sh0.25 was paid out on October2, last year.

The directors recommend payment of a final dividend of 0.25 per share (2008 – Sh0.25 per share) and subject to the approval of the shareholders at the AGM, dividend warrants will be posted on or about  May 12 to all members on the register at the close of business on March 25, 2010.

The directors also recommend a bonus issue of one ordinary share for every 10 ordinary shares held.

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