NCBA overdraft service Fuliza grew 31 per cent in six months to June 30 on account of increased borrowing stifling the growth earlier innovation M-shwari.
Cash advances totalling Sh290 billion was given out over the six months, compared to Sh220.38 billion in a similar period last year.
This translates to an overdraft of Sh1.6 billion daily between January and June this year, compared to Sh1.2 billion over a similar period in 2021.
On the other hand, loan disbursements via the M-shwari facility declined by six per cent to Sh42 billion.
"Half a year ago we signalled that we had reached the maturity of M-shwari and indeed what we are seeing in terms of disbursement is that this year we are below where were same time last year," NCBA Group managing director John Gachora said.
He added that the overdraft service has brought in all the customers it could potentially have and has limited organic growth for the future.
Fuliza, M-shwari and other digital loan products including MoCash, pushed NCBA's total digital loan-book to Sh339 billion for the period under review.
Fuliza became popular as banks cut loans to households and businesses following the freeze on credit reference bureau listing for the better part of 2020 amid high rates of defaults even on bank loans.
NCBA gross loans and advances for the half year period remained flat at Sh278 billion, which the group MD said was due the the short term repayment periods.
Net earnings for the period under review rose 67 per cent to Sh7.8 billion compared to Sh4.7 billion same period last year due to increase in operating income, strong expense management and decline i impairment charges.
NCBA's total operating income soared by 20 per cent year-on-year to Sh29.0 billion from Sh24.1 billion on the backdrop of a 10.4 per cent growth in net interest income.
The lender's net interest income grew to Sh14.8 billion compared to Sh13.4 billion the previous year.
Gross earnings increased to Sh11.9 billion from Sh7.8 billion.
The growth in profitability for the Group is largely attributable to higher revenue in the period and a drop in loan loss provisioning.
Provision for credit losses declined by six per cent to Sh5.6 billion while Non-performing-Loans coverage ratio declined slightly to 62per cent, from 68 per cent in the same period last year
Non-interest-funded income grew 32 per cent to Sh14.18 billion from Sh10.70 billion in the same period.
The Group’s total assets increased to Sh504 billion in the period under review from Sh542.6 billion in 2021.
Poor credit quality continued to hurt NCBA's Tanzania subsidiary which recorded another successive huge loss.
From a Sh238 million loss in 2021, the subsidiary almost hit 100 per cent in loss at Sh472 million, as the Group targets to close more branches in the country.
NCBA Bank Uganda on the other hand recorded an improvement from a Sh173 million loss in 2021 to a Sh293 million profit.
The lender's Kenyan subsidiary remain the most profitable, contributing Sh11.6 billion to the Group's earnings.
