NBK reports profit as merger comes to a close

In Summary

• The lender posted an Sh282.7 million loss over the same period last year.

• The good performance recorded over the first half of the year was driven by an improvement in operating income.

Customers inside NBK banking hall
Customers inside NBK banking hall
Image: FILE

The National Bank of Kenya has posted a Sh153 million six month net profit profit ahead of its proposed delisting at the Nairobi Securities Exchange.

This is an improvement a Sh282.7 million loss over the same period last year for the leander set to cease trading at the Nairobi bourse once the merger with KCB Group is finalised.

Chief executive Wilfred Musau attributed the improved performance by a better operating income.

National Bank’s operating income for the six-month period rose six per cent to Sh3.9 billion compared to Sh3.6 billion.

This was mainly due to an increase in interest from lending investments and a reduction in interest expense.

“The bank achieved this level of growth against the backdrop of a challenging environment, both externally and internally. The bank remains steadfast in its mandate for 2019,” Musau said.  

The listed lender’s total expenses, however, increased by six per cent year on year mainly driven by increased loan loss provisions and operating expenses.

Customer loans and advances dropped by Sh480 million which the bank attributed to reduced volumes in new loans issued and collections made on existing loans.

Customer deposits also declined to Sh91 billion as at June 30, 2019, compared to Sh96 billion last year.

The lender is expected to be delisted next week once an offer made by KCB for the merging of the two institutions is finalised.

KCB’s share swap offer which closes today, provides that NBK shareholders trade in 10 of their shares for one KCB share.

“As a consequence of the condition set by the shareholders of NBK, the ordinary shares to be issued pursuant to the conversion will not be in existence at the closing date,” KCB said in a statement released on Wednesday.

Once the offer is closed, KCB expects the suspension of NBK shares from trading at the Nairobi Securities Exchange to commence on September 2.

The bank’s total assets grew marginally by 1.1 per cent to Sh114.59 billion compared to Sh113.34 billion in the same period last year.