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Kenya

National Bank of Kenya posts profit

NAIROBI, Kenya, Aug 6 – The National Bank of Kenya has announced a 16.3 percent rise in profit after tax to Sh816.3 million for the half year ended June 30.

Total interest income went up from Sh2.12 billion in the corresponding period last year to Sh2.9 billion, representing a 36.4 percent increase.

“National Bank of Kenya reported a profit before tax of Sh1.2 billion compared to Sh1 billion during the same period last year. This is because of a steady increase in interest income, which grew by 36 percent to Sh2.9 billion from Sh2.1 billion last year. The major reason for this growth was the increase in loans and advances,” Managing Director Reuben Marambii said.

Loans and advances rose to Sh15.5 billion from Sh10.6 billion while total operating expenses grew from Sh1.8 billion to Sh2 billion. The bank’s total assets grew from Sh48 billion in the first half of last year to Sh59.3 billion.

The board of directors however did not recommend the payment of an interim dividend.

Mr Marambii expressed optimism that the growth plans that they have been putting in place would pay off and propel the bank’s performance in the second half.

“The Bank has now positioned itself on a growth path and intends to maintain the momentum through strategic branch expansion and innovative product and service offering. The bank is set to open a number of new branches in various locations in the country soon,” he added.

Meanwhile, Bamburi Cement posted a 21.9 decline in after tax profit to Sh2.4 billion for the first half of the year due to what it attributed to slower cement growth in Kenya and Uganda and high energy costs.

“Compared to the same period last year, the Group’s turnover reduced to Sh13 billion as a result of lower selling prices across all markets and the base effect of unusually higher market share recorded during the first half of 2009 due to unique market circumstances in Kenya, which was specific to last year,” said the cement manufacturer in a statement.

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During the period under review, the Group increased its repayment of its dollar denominated unsecured loan by Lafarge by $14 million to cushion itself against hard currency exposure.

Despite this decline however, the board has recommended an interim dividend payout of Sh1.50 for each ordinary share held.

The board has expressed optimism of posting better results in the second half buoyed by strong economic growth in Kenya and higher sales volumes due to the commissioning of a new production line in Uganda.

 “The prospects for the industry for the second half of the year look promising with the regional economies expected to achieve stronger growth in 2010 compared to (the) prior year,” it stated.

At the same time, the firm said it will continue to take cost cutting measures and cash generation initiatives in line with its customer expectation.

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