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NIC Bank Group posts rise in profit

NAIROBI, Kenya, Nov 25 – NIC Bank Group has reported a 68.7 percent increase in its profit before tax to Sh2 billion for the third quarter ending September 30, 2010.

Group Managing Director James Macharia said the financial results were boosted by a 27 percent growth in the loan book, a higher deposit base and a drop in the cost of funds.

“Total operating income grew by Sh1.0 billion to Sh3.9 billion, with net interest income recording an increase of Sh566 million to Sh2.4 billion, reflecting a 31 percent increase year on year,” the MD said in a statement adding that the performance also reflected the bank\’s diversification, with an offering of a wide range of financial services to both corporate and retail clients.

Total assets recorded a growth of 26 percent to reach Sh60 billion while the group’s deposit base as at September 2010 stood at Sh48 billion which reflected a 24 percent rise over the corresponding period last year.

During the period under review, total operating expenses increased by 12 percent to Sh1.9 billion mainly due to increased staff costs on account of branch and regional expansion.

Mr Macharia explained that the bank would continue to seek opportunities for new, strategic and commercially viable locations for organic and non-organic growth.

On the regional front, the MD announced that the recently acquired subsidiary in Tanzania, Savings and Finance Commercial Bank (S&F) Ltd had contributed positively to the bottom line.  

“The subsidiaries, both local and regional, contributed seven percent of the group profits,” said Mr Macharia adding that the re-launch of S&F as NIC Bank Tanzania before the end of the year was expected to enable the subsidiary to continue making significant contribution to the group’s profits in future.

On the local subsidiaries, he said both NIC Capital Investment Banking and NIC Securities Brokerage have recorded profits for the first nine months of 2010.

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Mr Macharia pointed out that the group’s Investment Banking arm NIC Capital,  was now a recognised player in both equity and debt capital markets and has been retained as the transactional advisor for a number of recent deals including the recently launched Housing Finance medium term note.  

Citing the recent launch of their new Entrepreneur Account which aims to empower budding entrepreneurs, he reiterated their commitment to continue rolling out products that meet their customer needs.

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