National Bank of Kenya (NBK) Managing Director Paul Russo during a past event. The lender has posted a Ksh155 million profit for Q1, 2020.

National Bank of Kenya (NBK) on Wednesday posted Ksh155 million profit after tax for the three months ended March 2020, a 134% increase in profit compared to a similar period the previous year when the lender posted a Ksh66 million profit. The lender’s unaudited financial results show.

The lender which is now a Kenya Commercial Bank (KCB) Group subsidiary is showing signs of recovery having cut its gross Non-Performing Loans (NPLs) to Ksh25 billion down from Ksh31 billion it reported following the KCB acquisition in September last year.

According to NBK Managing Director Paul Russo, the growth was driven by a growth in the loan book and cost management initiatives.

Russo, a KCB stalwart said that in his short stint as Managing Director, the new management has been able to turn around NBK’s fortunes but however noted that those efforts have been slowed down by the outbreak of COVID-19.

“We have made significant gains in turning around the business. Our recovery momentum has however been slowed down by the disruption of global economies by the COVID-19 pandemic, but we are continually innovating to mitigate its impact on the business” Russo said in a statement.

NBK’s total operating income for the quarter grew by 6.7% to Ksh2.34billion from Ksh2.2 billion, driven by increased interest income and fees and commissions.

The bank’s balance sheet grew to Ksh113.79 billion compared to the Ksh105 billion posted in Q1 2019.

Customer deposits grew to Ksh92 billion from Ksh89 billion during the comparable periods under review while loans and advances adjusted up to Ksh1.26 billion up from 1.16 billion.

Interestingly, the lender also cut directors emoluments to Ksh4.76 million in Q1 2020 down from Ksh9.72 million following the sacking of the bank’s former directors including COTU Secretary General Francis Atwoli.

Following a Ksh5 billion cash injection from KCB which will be followed by another Ksh3 billion in the second quarter of 2020, NBK’s core capital to deposits ratio has improved significantly to 6.7% from 2.2% but still falls short of the 8% recommended by the regulator.

According to Russo, this will be addressed through organic capital growth and support from shareholders.

NBK’s solid performance lifted its parent company KCB’Group’s Q1 2020 profit to Ksh6.3 billion up from Ksh5.8 billion compared to Q1 2019.

“We remain optimistic about the long-term future and sustainability of the bank. The main priority for us now is cushioning our customers from the effects of the COVID-19 pandemic while pursuing innovations across offerings, revamping our digital channels and exploring strategic partnerships” said Mr Russo.

See Also>>> Andela Steps Up Hunt For Budding Developers

LEAVE A REPLY

Please enter your comment!
Please enter your name here