BANKING

NCBA dethroned by Co-op as third biggest bank in Kenya

It however still the biggest bank in the country in terms of customer numbers

In Summary
  • NCBA's assets base hit Sh542.59 billion compared to Sh514.03 billion same period last year
  • Co-op Bank saw its total assets grow by Sh59.1 billion to Sh573 billion compared to Sh513.9 billion in the same period last year.
Nelson Gaichuhie, CAS The National Treasury and Planning and John Gachora, the NCBA Group Managing Director during the launch of NCBA 2020 Economic Outlook Report at Radisson Blu Hotel Nairobi
Nelson Gaichuhie, CAS The National Treasury and Planning and John Gachora, the NCBA Group Managing Director during the launch of NCBA 2020 Economic Outlook Report at Radisson Blu Hotel Nairobi
Image: COURTESY

The shutting down of several branches in Kenya due to Covid-19 on reduced business activities has seen NCBA bank relegated lender to the fourth position in Kenya.

NBCA  become the biggest lender in terms of assets after Equity Bank and KCB Group after a merger between NIC and CBA Bank in 2019. 

Even so, the merged entity closed 14 of its branches in the mid of the Covid-19 pandemic last year in a bid to cut costs and enhance efficiency. 

The lender said the merger had left the new outfit with branch overlaps while in some instances, the outlets face each other across the streets.

“On April 1, 2020, the bank announced the temporary closure of eight branches in response to Covid-19. After careful consideration, we have decided to permanently close seven of these branches,'' the bank said in a statement in July last year. 

It added that it had identified another seven more branches to be closed permanently.  

According to NCBA half-year results released yesterday, its assets base hit Sh542.59 billion compared to Sh514.03 billion same period last year, a six per cent growth.

Despite the growth has been demoted to fourth place by Co-operative Bank Group whose assets for the first six months of the year grew by  12 per cent to hit Sh573 billion. 

 Co-op Bank saw its total assets grow by Sh59.1 billion to Sh573 billion compared to Sh513.9 billion in the same period last year.

Equity Bank which was the first lender to hit $10 billion (Sh1 trillion) in asset value in East Africa maintained the leadership in Kenya with total assets hitting Sh1.12 trillion followed by KCB Group at slightly over Sh1 trillion. 

NCBA is, however, is still the biggest bank in the country in terms of customer numbers, thanks to its partnership with Safaricom Plc via M-Swari and Fuliza.

The bank's net earnings for the first six months of the year grew 77 per cent to Sh4.7 billion from Sh2.6 billion in the corresponding period last year. 

The growth in profitability was attributed to an increase in operating income by Sh2.8 billion, driven by higher customer activity and a decline in loan impairment charges by Sh1.7 billion.

Commenting on the results, NCBA Group MD John Gachora said the strong financial results are outcomes of a steadily improving economic environment and early outcomes of the Group’s focus on its strategic initiatives anchored on customer experience.

“The year demonstrates that the actions we have taken to strengthen and enhance the Group’s performance are bearing fruit. We have made a concerted effort to reduce the risk in our credit portfolio while balancing the need to support our customers during this Covid-19 period,'' Gachora said.

Non Performing Loans coverage ratio increased to 68per cent, from 55per cent in the same period last year while operating profit before loan loss provisions grew 16 per cent to Sh13.3 billion.

Elsewhere, regional financial services provider, I&M Group Plc announced an increase of 33 per cent after-tax profit in the first six months of the year to June 30.

The profit grew from Sh3.2 billion to Sh4.2 billion.

The Group’s total assets recorded a growth of 12per cent to close at Sh382.6 billion up from Sh340.6 billion in June 2020 bolstered by expansion into Uganda and increased private and public sector lending.

The acquisition of Orient Bank Ltd (OBL) in Uganda expanded the I&M's balance sheet by Sh23.5 billion as of the reporting date. 

I&M chairman Daniel Ndonye said the Group’s focus on increased lending to both the private and the public sector was key in determining the bank’s growth at a time when economies the world over were hard hit by the effect of the Covid-19 pandemic.