EARNINGS

NCBA Q1 profits up 20% to Sh3.4 billion

Gross profits also grew by 25% to Sh4.9 billion

In Summary
  • The bank's assets increased to Sh587 billion in the period under review
  • The lender's non-performing loan ratio stands at 15.8%
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

NCBA Group's net earnings for the first three months of the year rose 20 per cent to Sh3.41 billion up from Sh2.84 billion last year on strong business development. 

The lender's profit before tax rose by 25 per cent to Sh4.85 billion. 

The bank's managing director John Gachora said the results reflect strong underlying performance across all areas of the business and an improving economy. 

“Our financial results this quarter, are a strong reflection that the post-merger foundation that we have built is very solid and is unlocking growth opportunities while delivering operational efficiencies,” Gachora said. 

The bank's assets increased to Sh587 billion in the period under review, representing eight per cent growth year on year.

Customer deposits in the period also increased by seven per cent to Sh465.5 billion fuelled by strong business development efforts that have attracted new customers to the bank

Net interest income recorded an eight increase year on year due to growth in interest income from treasury investments.

The overall effect was an operating income in the period that closed at Sh 13.2 billion representing 11per cent growth against the prior year's performance.

The Group gross loans stood at Sh285.2 billion, representing two per cent year-on-year growth in all banking subsidiaries.

Digital loan disbursements, however, increased significantly by 26 per cent to Sh163.4 billion from Sh129.9 billion during the same period a year ago.

This is in line with NCBA Group’s digitisation agenda and its commitment to supporting small businesses and individual customers during this period.

NCBA Group’s non-performing loan ratio stands at 15.8 per cent, largely in line with industry-wide levels. Its NPL coverage ratio improved to 72.6 per cent from 65 per cent in the same period last year.

"The group's focus on maintaining high credit quality as well as the concerted recovery efforts, particularly in the digital lending business has begun to bear fruit in stabilising the credit portfolio,'' Gachora said.

The bank's capital and liquidity levels remain very strong, with liquidity at 63 per cent and total capital / total risk-weighted assets at 17.9 per cent.  

Last year, the lender more than doubled its full-year net profit from Sh4. 6 billion in 2020 to Sh10. 2 billion. The growth was driven by a strong performance from its banking, unit trust and investment bank operations.