NCBA CEO John Gachora makes remarks during a past briefing. The bank on Thursday announced the exit of two boardroom stalwarts.

NCBA group on Thursday reported a 45% reduction in profits for the nine months ended September 30, 2020, to report a Ksh2.5 billion profit after tax down from Ksh4.6 billion reported at the same period the previous year.

A key highlight of the lender’s financial results is the loan loss provision which increased by 571% to Ksh13.3 billion up from Ksh2 billion, the highest increase of any lender listed at the Nairobi Securities Exchange (NSE) yet, at a time when banks are having to go an extra notch to cover for their customers who are expected to default en masse after being strained by COVID-19.

“Conservative provisioning for potential loan losses reduced the operating gains to result in a profit before tax of KES 3.8 billion for the nine months compared to KES 6.8 billion last year. The Group continues to put in place measures to minimize the impact of the pandemic while implementing its strategic initiatives to safeguard shareholder value and enable the Group’s success in future,” the lender’s board said in a statement.

During the period under review, the lender’s balance sheet grew to Ksh514 billion from Ksh272 billion as customer deposits ticked up to Ksh402.6 billion from Ksh214 billion.

The group’s interest income increased by 107% to Ksh31.2 billion from Ksh15 billion lifted by loans and advances.

On the other hand, non-interest income surged to Ksh16.1 billion from Ksh10.1 billion. Forex revenue increased to Ksh3 billion from Ksh1.85 billion.

Operating profits for the period ended September 2020 was Ksh17.8 billion compared to Ksh9.1 billion for the same period last year.

Conversely, operating expenses increased to Ksh29 billion from Ksh11 billion.

The lender says it had granted loan moratoriums and restructured loans amounting to Ksh76 billion to corporate and retail customers by the end of September 2020 following the outbreak of COVID-19.

“The NCBA Group has supported its customers throughout this period and has disbursed Ksh 310 billion in digital loans thus enabling small enterprises and individuals to manage their day-to-day needs and working capital,” the lender said in a statement.

Cumulatively, the group’s profitability as measured by Earnings Per Share (EPS) fell to Ksh1.65 from Ksh16.01.

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