NCBA Bank has recorded a decline in its net profit from Ksh. 7.8 billion to Ksh. 4.5 billion at the close of the financial year ended 31st December 2020. This is a 42% decline of its net profit compared to a similar period the previous year.

The lender attributed the decline to the coronavirus pandemic and containment measures which resulted in the disruption of regular business operations. “These factors resulted in higher delinquency levels thus necessitating that the Group prudently take significant loan loss impairment reserves, ultimately impacting the profit before taxation,” read a statement in the bank’s audited financial results.

This is the first time NCBA is announcing full-year results as an entity, following the successful merger of NIC Group PLC and CBA in October 2019.

Total interest income decreased from Ksh. 25.5 billion to Ksh. 13.3 billion.

Key highlights from the results include

  • Net operating income of Ksh. 46.4 billion, up 38%.
  • Non-funded income remained a key revenue driver contributing 45% of operating income.
  • Operating profit before provisions up 37% to Ksh. 26.8 billion.
  • Pre-tax profit of Ksh. 4.98 billion, down 56% due to increased impairments.
  • Profit after tax of Ksh. 4.6 billion, down 42%.
  • Net interest income closed at Ksh. 25.5 billion.
  • Asset base rose to Ksh. 528 billion.
  • Deposits stood at Ksh. 421.5 billion.
  • Net loan book stood at Ksh. 248.5 billion pre-tax profit.
  • Non-Performing Loans stood at Ksh. 40.1 billion up 19%.
  • Non-performing loan provision coverage 61% up from 56%.
  • Directors have proposed a dividend payment of Ksh. 1.50 per share to be approved at its Annual General Meeting scheduled to be held on 9th June 2021.

In 2019, the bank recommended a similar dividend payout but compared to later reversed the decision to conserve liquidity. Shareholders were instead issued bonus shares in the proportion of one new share for every ten shares held.