NAIROBI, Kenya, May 20 – National Bank of Kenya (NBK) has posted Sh155 million in profit after tax for the first quarter of 2020 ending March, representing a 134 percent increase compared to a similar period last year.
The bank says the performance from Sh66million posted the previous year was driven by a growth in the loan book and cost management initiatives.
Managing Director, Paul Russo said: “We have made significant gains in turning around the business. Our recovery momentum has however been slowed down by the disruption of global economies by the COVID-19 pandemic, but we are continually innovating to mitigate its impact on the business”.
The Bank’s total operating income for the quarter grew by 6.7 percent to Sh2.3billion, driven by increased interest income and fees and commissions.
Operating costs remained relatively flat on prudent cost management, absorbing further investments in new branches, digital channels and systems for operational efficiency.
During the quarter, the Bank’s balance sheet strengthened, to stand at Sh113.8billion. Customer deposits grew to Sh92billion, compared to Sh89.5billion in Q1 2019. Loans and advances also increased by Sh1.9billion to Sh47.8billion, with the boost in operations from the Sh5billion capital injection from KCB Group Plc.
The financial results indicate a strong recovery by the bank, following its acquisition by KCB Group Plc in September 2019. The Non-Performing Loan (NPL) book shrank by 20 percent for the period ending March 31, 2020. The bank’s total NPL stock stood at Sh25.1billion, compared to Sh31.5billion last year.
Core capital improved significantly, following injection of new capital from KCB Group Plc. While this has boosted capital ratios, they still remain marginally below regulatory requirements. This is set to be addressed through organic capital growth and support from the shareholder.
The bank’s liquidity position improved to 45.7 percent, compared to 40.4 percent the previous year.
Russo said: “We remain optimistic about the long-term future and sustainability of the bank. The main priority for us now is cushioning our customers from the effects of the COVID-19 pandemic while pursuing innovations across offerings, revamping our digital channels and exploring strategic partnerships”.
Following the pandemic, NBK has taken measures to cushion customers from its negative impacts. This includes restructuring customer loans, in addition to suspending listing on the credit reference bureau and waiver of fees charged on use of digital channels.