National Bank (NBK) becomes the latest listed company to issue a profit warning taking cue from Kenya Re and a host of other companies that have cautioned their shareholders over an imminent profit fall exceeding 25% for the full year ended December 31, 2018.
The lender attributes the projected revenue fall to increased loan impairment charges beyond initial projections due to a revision of valuations and values recoverable from the non-performable loan portfolio.
NBK also says that the expected profit slump could be due to a one off restructuring cost undertaken as part of a wider business alignment but exudes confidence that the full benefits of the exercise will be felt in 2019.
“The board of directors and management of the bank remain committed to ensuring shareholder value is delivered and have implemented various initiatives to grow the business, reduce non-performing loans and retain costs,”
“They are confident that these initiatives will ensure improved performance in 2019,” board chairperson Mohamed Hassan said in a statement.
While the profit warning is not welcome news for shareholders, the lender on February 22 announced that it had raked in Ksh2.5 billion from wealthy investors.
Managing director Wilfred Musau said that the company has identified the rich as a valuable clientele and has been working to align their business to the tastes and preferences of the upper crust.
“The launch of our premium banking centres and products is one of the key transformational initiatives of the bank aimed at driving future growth,” he said.