NATIONAL BANK OF KENYA POSTS 87M NET PROFIT

NATIONAL BANK OF KENYA POSTS 87M IN NET PROFIT

By Cosmas Butunyi

National Bank of Kenya (NBK) posted KShs.

87million in profit after tax for the nine months

ending September 2020. This represents a 77%

decline over a similar period last year due to

effects of the COVID-19 pandemic.

The bank recorded a profit before tax of KShs.

535million representing a 7% increase over a

similar period in 2019.

The corporate and retail franchises of the Bank

remained resilient, amid a subdued economy

and reduced activity across sectors, due to the

crisis.

“These results demonstrate the Bank’s

resilience, in the face of a very challenging

operating environment. They have been buoyed

by ongoing efforts to turnaround this institution

that have however been slowed down by effects

of the COVID-19 pandemic,” said NBK

Managing Director Paul Russo.

Non-funded income grew by 5% from the

previous year, on increased focus on digital

banking. Interest income stood at KShs.

7.2billion, a growth of 9% due to increased

volumes in loans and advances as well as

sustained recoveries. Comparatively, interest

expense remained relatively flat at KShs.

2billion.

Total operating costs increased by 14%, largely

driven by increased provisioning to cover for

higher credit risks due to the pandemic in a

period that also saw the Bank continue to drive

cost management initiatives.

On the balance sheet side, total assets grew by

21% to KShs. 129.5billion from KShs.107billion,

majorly from net loans and advances which

were up 12% to KShs. 53billion. This was also

supported by increased customers and

deposits which grew by 24% to KShs.102billion.

Total non-performing loans and advances stood

at KShs. 23.3billion, a 15% drop from KShs.

27billion year on year.

The Bank recorded improvements in key ratios

such as the capital position. Liquidity ratio was

at 47.3%, compared to 35.7% in 2019.

“We remain cautiously optimistic about the

future of the bank. We continue to invest in

revamping our channels and delivering an

unmatched experience to our customers,” Mr.

Russo added.