FINANCIAL POSITION

National Bank profits drop 98% in 12 months

In Summary

• Within the reporting period, customer deposits increased by five per cent from Sh94.3 billion in 2017 to Sh98.9 billion due to new businesses.

• Net loans and advances reduced by nine per cent to Sh47.8 billion from Sh52.4 billion the previous period.

National Bank CEO Wilfred Musau and Chairman Mohamed Abdirahman Hassan during the bank's AGM in Nairobi, May 19, 2017. /FILE
National Bank CEO Wilfred Musau and Chairman Mohamed Abdirahman Hassan during the bank's AGM in Nairobi, May 19, 2017. /FILE

National Bank has reported a 98.3 per cent drop in profits for the year ended December 31, 2018.

The bank made Sh7.007 million in profit compared to Sh410.78 million made within the same period in 2017.

In its nine months reporting, the bank announced an 84 per cent drop in profit to Sh21.97 million.

According to the banks Chief executive officer Wilfred Musau, the huge drop is as a result of a difficult operating environment within the year as well as reduced lending due to capital constraints.

“During the year, the bank incurred a one-off exceptional cost relating to Voluntary early retirement cost of Sh541 million in 2018,” Musau said.

The bank has in the recent past registered poor performance raising concerns over its operations.

Within the reporting period, customer deposits increased by five per cent from Sh94.3 billion in 2017 to Sh98.9 billion due to new businesses.

Net loans and advances reduced by nine per cent to Sh47.8 billion from Sh52.4 billion the previous period as a result of one-off impact of IFRS 9 adoption and reduced loan volumes as the bank operated within the compliance capital ratios.

In a statement, the banks board said they plan to dispose investments in non-core assets, and carry out cost reduction initiatives to restore capital and profits.