NCBA Group Managing Director John Gachora pic
“While we are cautiously optimistic about economic recovery, we have put in place the building blocks to unlock opportunities in this recovery period,” says Mr John Gachora, managing director of NCBA. [ Photo/pd.co.ke

NCBA Group PLC has recorded an after-tax profit of Ksh2.84 billion for the first quarter ending March 31, 2021. This was an increase of 74% compared from Ksh1.6 billion that the NCBA Group posted during a similar period in 2020. Profit before tax stood at Ksh3.9 billion.

NCBA Group Managing Director John Gachora said the results reflected strong underlying performance across all areas of the business and a slowly improving economy. “NCBA Group has demonstrated the ability to tightly balance strong credit discipline with its commitment to support its customers during this period,” Mr Gachora said. “These actions have further strengthened the balance sheet and made the business even more resilient to navigate the unfolding impact of COVID-19.”

He said 2021 is being seen as a transition year following the finalization of the merger and consolidation of all entities, systems and processes of CBA Group and NIC Group across the region in 2020. “With the conclusion of this phase, the NCBA Group now has a solid foundation from which to springboard and boldly pursue its long-term strategy,” Mr Gachora said.

In Q1 2021, total assets increased to Ksh542 billion, representing a strong growth of 6% year on year. Customer deposits in the period also increased by 11% year on year fuelled by strong business development efforts that have attracted new customers to the Group.

Net interest income recorded a 20% increase year on year due to growth in interest income from treasury investments and a reduction in interest expense following the retirement of NCBA Group’s medium term note in Q3 2020. The overall effect was that, operating income in the period closed at Ksh11.8 Billion representing 8% growth against prior year performance.

The company gross loans stood at Ksh283 billion, representing 2% year on year growth in all banking subsidiaries. Digital bank disbursements, however, increased significantly by 26% to Ksh134 billion from Ksh108 billion during the same period.

NCBA Group’s non-performing loan ratio stands at 13.99% in line with industry-wide levels given the impact of COVID-19. In Q1 2021, NCBA Group further built its credit impairment coverage to mitigate against continued adverse impact, improving the NPL coverage ratio to 65% from 54% in the same period last year.

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Additionally, NCBA Group’s concerted recovery efforts, particularly in the digital lending business have begun to bear fruit in stabilizing the credit portfolio.

PERFORMANCE HIGHLIGHTS

  • Assets grew to Ksh542.1Bn, 6% up year on year.
  • Customer deposits closed at Ksh432.2Bn, 11% up year on year.
  • NCBA Group disbursed Ksh134 billion in digital loans, 22% increase year on year in line with its digitization agenda and its commitment to supporting small businesses and individual customers during this period.
  • Operating income increased to Ksh11.8Bn, 8.3% up year on year.
  • Provision for credit losses for the quarter was Ksh2.6 billion as NCBA Group continues to mitigate against the impact of COVID-19.
  • NPL coverage ratio improved to 65%, from 54% in the same period last year.
  • Profit before tax of Ksh3.9 billion.
  • Profit after tax of Ksh2.8 billion.

GROUP STRATEGY & OUTLOOK

Mr Gachora said NCBA Group has embarked on an ambitious growth strategy, which will include expanding its branch network, rolling out new innovative digital products and services and doubling down on its core strengths of Corporate Banking and Asset Finance.

“We have kicked off the year with a strong start and already made significant investments in new products, technology and distribution, to position the business for a period of sustained growth,” he said.

During the first quarter, NCBA Group opened a new branch at Jomo Kenyatta International Airport, Cargo Handling Terminal, and plans to open 15 more branches across the country throughout the year.

“While we are cautiously optimistic about economic recovery this year, we believe that we have put in place the building blocks to unlock the opportunities that will emerge from this recovery period,” said Mr Gachora.

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