NATIONAL BANK OF KENYA POSTS 62% GROWTH IN HALF YEAR PROFIT

NATIONAL BANK OF KENYA POSTS 62% GROWTH IN HALF YEAR PROFIT

By Cosmas Butunyi

National Bank of Kenya (NBK) posted Kshs.

186million in profit before tax for the first half of

the year ending June, representing a 62%

increase from a similar period last year.

The Bank’s performance, despite the effects of

the COVID-19 pandemic, was driven by a growth

in the loan book and enhanced returns from

investments in government securities.

However, profit after tax reduced from KShs.107

million to a loss of Kshs. 381million due to a

one off tax adjustment after the recent change

in corporate tax.

“We remained resilient during the first half of

the year, despite the slowdown occasioned by

the pandemic. We are replacing non-performing

loans with quality ones; and constantly

innovating to align with current realities,” said

Paul Russo, the NBK Managing Director

“We are focused on delivering valuable

partnerships and solutions to our customers.

These efforts are bearing fruit as demonstrated

by a recent survey of customers, whose overall

feedback was appreciation for our dedication,”

added Mr. Russo.

The Bank’s total operating income for the period

grew by 12% to Kshs. 4.3billion, driven by

increased interest and non-interest income.

Following the bank’s waiver on charges for

transactions on digital channels, as a measure

to mitigate the impact of COVID-19, fees and

commissions during the period remained

relatively flat. Operating costs were stable on

the back of ongoing cost management

initiatives.

The Bank’s balance sheet for the period grew to

Kshs. 119billion driven by growth in customer

loans and deposits. Customer deposits rose to

Kshs. 99.6billion, from Kshs. 91.7billion in a

similar period in 2019; with liquidity improving

to 50.2% from 40.7% over a similar period.

Loans and advances increased by Kshs.

2.9billion to Kes 50.2billion.

The Bank’s recovery journey stayed on course

during the first half, with the Non-Performing

Loans (NPL) shrinking by 12% for the period

ending June 30, 2020 to stand at Kshs.

28.6billion, compared to Kshs. 32.4billion last

year.

NBK has taken measures to cushion customers

from negative impacts of the pandemic. 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.