NBK posts 171% increase in Q3 net profit
Growth on loan interest, advances and other earning assets, coupled with diversification of funding base contributed to National Bank of Kenya’s 171.3 per cent in profit during its Q3, 2019 financial report.
According to the report, NBK posted a net profit of Sh407.2 million in the period ending September 30, 2019, compared to Sh21.96 million received in a similar period in 2018.
The bank which now operates as a subsidiary of Kenya Commercial Bank (KCB) also reported a 45 per cent increase in profits before tax and exceptional items of Sh675 million for the period which ended on September 30, 2018.
NBK’s managing director, Paul Russo, attributed the increase in profitability to growth in operating income during the period under review adding that the future looks even more promising.
“With the improved capital base, our focus is now on integrating NBK into the group, while continuing to deliver innovative financial solutions that are attuned to the dynamic needs of our customers. We are optimistic about the bank’s fortunes,” Russo said.
Operating income for the period stood at Sh6.0 billion, which was a 7 per cent increase from Sh5.6 billion over the same period in the previous year.
This was mainly due to growth in interest earned from loans & advances and other earning assets, coupled with continuing diversification of funding base, which resulted in a reduction of interest expense by 8 per cent year on year.
Total expenses, however, increased by 4 per cent year-on-year to Sh5.4 billion, mainly driven by increased loan loss provisions. Operating expenses excluding loan provisions remained relatively flat at Sh5.4 billion
Customer deposits, reduced to Sh82 billion as at September 30, 2019, compared to Sh93 billion over the same period in 2018, driven by reduced customer flows and tight liquidity in the market.
Net loans & advances declined by Sh150 million to Sh47.8 billion over the same period issued due to recoveries collections made on existing loans. Total assets dropped marginally by 5.0 per cent to Sh107.2 billion compared to Sh112.45 billion in the same period last year
“The bank achieved this level of growth against the backdrop of a challenging environment, both externally and internally. Our main focus has been enhancing customer experience, preserving and optimizing value while effectively mitigating risks through proactive risk management,” Russo said.
