NAIROBI, Kenya, May 20 – The National Bank of Kenya (NBK) has announced an increase in after-tax profit of 12.5 percent during the first quarter ended March 31, 2013.
The bank’s net profit rose to Sh368.2 million from Sh327.3 million over the same period last year.
Interest income decreased from Sh2.2 billion to Sh1.8 billion, a 19 percent drop over the same period last year while interest expense dropped from Sh918.4 million to Sh553.8 million due to lower cost of funds.
Loans and advances to customers decreased from Sh28.5 billion to Sh27.1 billion which translates to a five percent drop.
“This was as a result of a deliberate effort to reduce the exposure of the bank to personal unsecured lending and diversify lending and investments,” the bank’s Managing Director Munir Ahmed pointed out while releasing the results on Monday.
However total operating expenses decreased from Sh1.4 billion to Sh1.3 billion, over the same period last year.
In the period under review, customer deposits recorded a 17.7 percent increase over previous year from Sh58 billion to Sh68.3 billion.
Total assets also increased by 19.2 percent from Sh70.2 billion to Sh83.7 billion.
Ahmed said the bank was undergoing a transformation that included deploying new strategic plans, innovation including product and business, risk management and building new competencies.
To support balance sheet growth in its Kenyan business and fund expansion into the region going forward, the bank plans to undertake a rights issue within the next 18 months.
The funds will be used to open 10 new branches in Kenya and start operations in South Sudan, Uganda and Somalia.
NBK is targeting revenue of Sh31 billion by 2017, compared to Sh8 billion last year.
In 2012, NBK recorded a 52.8 percent drop in full year net profit to Sh729.8 million from Sh1.5 billion. It was the only publicly traded lender in country to report a drop in profit in 2012.