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NBK Q1 2021 Profit After Tax Grows 19%, Driven By Loans

Customer deposits increased to Ksh99 billion as loans and advances rose by Sh10 billion

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NBK Profit 2021: The National Bank of Kenya (NBK) has posted Ksh184million in profit after tax for the first quarter of the year ending March 31, 2021. This represents a 19% growth compared to a similar period last year, driven by increased income from loan interest and foreign exchange trading as well as lower loan loss provisions.

NBK Managing Director Paul Russo said the quarter was marked by pockets of slow recovery from effects of the COVID-19 pandemic due to the gradual reopening of the economy after a period of subdued activity.

“Having received a boost in Tier 2 Capital from the KCB Group PLC, we are now well positioned to continue growing the business and supporting our customers to weather effects of the pandemic. Further, the capital injection enhances our compliance with regulatory ratios,” added Mr Russo.

The KCB Group injected $30 million (Ksh3 billion) in additional debt capital into NBK in April 2021 to enhance the bank’s capital buffers.

During the quarter, net interest income grew by 5% from the previous year to stand at Ksh1.9 billion. This was contributed by interest income which grew by 11% to Ksh2.7 billion due to increased volumes of loans and advances as well as sustained recoveries. The quarter was marked by a 28% growth in interest paid on increased customer deposits, from transactions on the revamped digital channels.

Total operating costs during the quarter remained relatively flat at Ksh2.09billion, compared to Ksh2.11 billion over a similar period in 2020. This was despite increased investments in enhanced cybersecurity measures and revamp of the core banking system.

On the balance sheet side, total assets grew by 14% to Ksh114 billion, majorly from net loans and advances, which were up 20% to Ksh58billion. This was also supported by increased customer deposits which grew by 8% to Ksh99 billion due to increased flows among existing clients and new accounts in corporate and retail (including National Amanah – The bank’s Islamic Banking business) franchises of the Bank.

“We remain optimistic about prospects for this year in our efforts to turnaround the bank and deliver value for our customers,” Mr Russo said. “As economic activity picks up, the bank’s enhanced capital position puts us in good stead to help our customers walk the path to recovery after the slowdown due to the pandemic.”

See >> NBK To Pay Sh510M For Disallowed Tax Credit Claims

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BT Correspondent
BT Correspondenthttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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