, NAIROBI, Kenya, Nov 24 – NIC Bank has reported a 29.3 percent rise in net profit to Sh1.76 billion in the first nine months compared to Sh1.36 billion posted in the corresponding period last year.
Despite operating in a challenging environment characterised by high inflation NIC, which is known for its strength in asset financing, grew its net interest income by 25 percent to Sh3 billion. This was attributable to the growth in the loan book by 42 percent from Sh38.1 billion to Sh54.3 billion by September 2011.
NIC Group Managing Director James Macharia attributed the performance to the bank’s resilience and ability to source new business lines to post positive results.
“The financial results are commendable given the ongoing challenging operating environment which is characterized by high inflationary pressures, high interest rates and exchange rate volatility,” Macharia said.
Total non funded income grew by 15 percent to Sh1.7 billion up from Sh1.5 billion. Non funded income contributed 36 percent of the total operating income.
Macharia said that the growth in non funded income was in line with group’s long term strategy to diversify its revenue streams.
He was however wary of the effects that high inflation and interest rates in Kenya could slow economic growth.
“The external and domestic shocks, which have resulted in high inflation and tightening of the monetary policy, are expected to slow down the growth momentum of the Kenyan economy,” the MD said.
In an effort to further reach out to our customers as well as have a presence in new strategic and commercially viable locations, the bank has undertaken a well planned branch expansion program.
The first phase of this program has been successfully executed with at least four new branches already opened in last six months.
“This has given us impetus to hasten the opening of new branches at the Karen Office Park and Taj Mall before the end of the year”, Macharia said.
The growth and development of the subsidiary companies has remained a key strategic thrust and is aimed at broadening both the range of financial services offered to customers and enhancing the diversity within the bank.
The group subsidiaries, NIC Bank Tanzania, Investment Banking, Bancassurance and Brokerage contributed eight percent (Sh194 million) of the year on year increase in the Group’s Profit before tax.
“To maintain our regional footprint, plans are at an advanced stage to establish a banking subsidiary in Uganda,” he said.