Shares

NIC Bank Kenya became the third  bank to release its 2016 full year results after Barclays and KCB. In keeping with the trend in the banking industry after the enactment of the interest rate cap, their net profit dropped to Ksh 4.1 Billion from Ksh 4.3 Billion in 2015.

Despite the drop in net profit, interest income from loans and advances rose to Ksh 14,212 Billion up from 12.9 Billion in 2015. Income from government securities also rose to Ksh 3.2 Billion from Ksh 2.3 Billion in 2015. This increase in the income from government securities was due to an rise in investment from Ksh 19.7 Billion in 2015 to Ksh 23.7 Billion. This saw the net interest income rise to Ksh 17.5 Billion from Ksh 15.5 Billion in 2015. Net non-interest income experienced a slight increase from Ksh 3.4 Billion in 2015 to Ksh 3.4 Billion. Total operating income increased to Ksh 14.6 Billion from Ksh 12.2 Billion in 2015.

Customer deposits saw a dip from Ksh 105,194 Billion in 2015 to Ksh 104,160 Billion. This ultimately led to a subsequent decline in the interest expense on customer deposits to Ksh 4.9 Billion from 5.4 Billion in 2015. Loan loss provision due to bad and doubtful loans experienced a massive increase from Ksh. 1,539 Billion in 2015 to Ksh. 3.7 Billion, this could be a reflection of the bad business environment In 2016 which led to defaults.  Due to this total operating expenses increased from Ksh 6 Billion in 2015 to Ksh 8. Billion.

Despite the fall in profits the directors recommended the payment of Ksh. 1 per share subject to approval by shareholders at their Annual General Meeting.