The National Bank of Kenya (NBK) has announced a Ksh.106.3 million net profit for the period ending March 31, 2019, to effectively end a 15-month dip in performance.
This represents a 138% increase in profitability from the loss position in quarter one 2018 which was occasioned by one-off exceptional item. The profit is mainly attributed to growth in operating income from.
National Bank Managing Director and CEO Wilfred Musau, said operating income for the period was Sh2.2 billion, a 26% increase from Sh1.7 billion recorded in the same period the previous year mainly due to improved funding mix, recoveries from NPL book and interest-earning assets.
“This is in line with our strategy of improving our net interest margin by lowering the cost of funding and accelerating recoveries and remediation of the NPL book,” He said.
The lender rebounded from a Ksh.278.5 million loss over the preceding quarter in 2017 from an effective increase in interest funded income and hold in the growth of Non-Performing Loans (NPLs).
Total interest income was up by 20% over the quarter on an account of increased lending as the bank pushed a further Ksh.455 million through its client loan book and government securities respectively.
Customer deposits increased to Sh89 billion compared to Sh86 billion in quarter one 2018 as the banks’ strategy of driving business growth through enhanced mobile offering, diaspora and MSME continued to bear fruit. This supported an improved liquidity position which was 40.4% compared to 29.9% in 2018.
The Bank won the 2nd Runners up Most Customer-Centric Banks in Kenya during the 14th annual banking awards by Think Business.
National Bank has been on an upward trajectory on Service excellence. The bank has consistently been recognized and won Customer Service Excellence Awards since 2015 by different sectoral bodies such as Institute of Customer Excellence – Kenya (ICX-K), Kenya Bankers Association and Think Business.
The bank which remains under the subject of an impending acquisition by KCB had seen its full-year earnings to December 31st, 2018 eaten away to a mere Ksh.7 million as restructuring costs and increased loan impairment crippled growth.
The proposed acquisition which still awaits shareholder and regulatory approval to include an inquiry by parliament is expected to see NBK operate as a KCB subsidiary in the short run before its incorporation to the acquirer.
NBK shareholders are expected to part with 10 shares for each of the acquirer’s shares in a transaction that now has the blessing of KCB Group shareholders.