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National Bank posts Sh282M loss in first six months of 2018

Management says the bank is yet to receive comprehensive capital injection promised from the government but says the process is ongoing./FILE

NAIROBI, Kenya, Aug 22 – National Bank of Kenya (NBK) has posted Sh282 million losses in the first half of 2018, compared to Sh179 million profit made same period the previous year. 

Loans dropped by Sh10 billion to Sh47 billion from Sh57 billion posted last year.

Total Assets dropped to Sh113 billion from Sh116 billion in June 2017 while total interest Income hit Sh4.1 billion a drop from Sh4.5 billion same period 2017.

Management says the bank is yet to receive comprehensive capital injection promised from the government but says the process is ongoing.

“The implementation of IFRS 9 also complicated capital ratios as credit loss provisions were added back to capital,” management said.

The Government has planned to inject capital into the National Bank of Kenya in a bid to support the growth of the bank.

In a letter addressed to the Financial Services regulator (CBK), the Treasury in March indicated its commitment to provide a comprehensive and long-term solution on the capital position to bridge compliance, support business growth and meet ICAAP requirements.

The core capital injection will be fast-tracked and is expected to be completed within a period of 180 days (six months).

The bank says the capital will bolster its focus on improving customer transactions, manage operational and market risks, whilst enhancing its drive to grow current customer transactions and acquisitions.

“The solid commitment made by our major shareholders to tackle the recapitalization is an overt approval of the measures taken in the financial year under review to sustain growth. The capital injection will unlock and bolster the key pillars of our growth going forward,” the Bank’s Managing Director, Wilfred Musau.

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