National Bank of Kenya (NBK) has announced that it has posted a Ksh. 155 million in profit after tax for the first quarter of 2020 ending March. This is a 134% increase when compared to a similar period last year.
The company posted a Ksh. 66 million net profit last year and the growth this year has been driven 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% to Ksh. 2.3 billion, driven by increased interest income and fees and commissions. Operating costs remained relatively flat due to 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 Ksh. 113.8billion. Customer deposits grew to Ksh. 92 billion, compared to Ksh. 89.5billion in Q1 2019. Loans and advances also increased by Ksh. 1.9 billion to Ksh. 47.8billion, with the boost in operations from the Ksh. 5 billion 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% for the period ending March 31, 2020. The bank’s total NPL stock stood at Ksh. 25.1 billion, compared to Ksh. 31.5billion last year.
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.
National Bank of Kenya is a Kenyan Commercial Bank and is a subsidiary of KCB Group Plc. Established in 1968 to boost Kenyans’ access to finance, it has grown to be one of the largest commercial banks in the country with a growing network of 85 branch outlets across the country, over 1500 ATMs and electronic channels of Mobile and Internet Banking. In September 2019, the Bank became a subsidiary of KCB Group Plc following a successful acquisition.