NCBA Group PLC has posted a profit before tax (PBT) of Ksh11.1 billion in its quarter three results ending September 30, 2021. The PBT of Ksh11.1 billion is a three-fold increase compared to Ksh3.8 billion reported during a similar period last year.
The Group registered a nine-month profit after tax of Ksh6.5 billion representing 159 percent growth up from Ksh2.5 billion reported in a similar period in 2020. Growth in profitability was attributed to an increase in operating income to Ksh36 billion (up Ksh3.2 billion), driven by higher customer activity and a decline in loan impairment charges of Ksh4.2 billion year over year.
Asset base rose to Ksh563 billion, eight percent up year on year while customer deposits closed at Ksh447 billion, 11 percent up year on year
The Group disbursed Ksh423 billion in digital loans, a 26 percent year on year while the operating income of Ksh36 billion, 10 percent up year on year
Cost to income ratio of 43 percent, an improvement from 46 percent in the same period last year
The lender recorded an operating profit before loan loss provisions of Ksh20 billion, 17 percent up year on year while loan impairment charges for the period stood at Ksh9.2 billion, 31 percent down year on year.
Non-Performing loans coverage ratio increased to 70 percent, from 58 percent in the same period last year.
Commenting on the results, NCBA Group Managing Director, John Gachora said the strong financial results are early outcomes of the Group’s focus on its strategic initiatives anchored on customer experience and of a steadily improving economic environment.
“Our operating results since the beginning of the year demonstrate that the actions we have taken to strengthen and enhance the Group’s performance are well on track. We continue to exercise a conservative approach towards credit risk management. Looking at our results, you will note that our loan impairment charges, which were a drag on performance last year, have greatly reduced; 98 percent of the portfolio that we restructured during the COVID-19 period is now performing. We have also realized cost synergies from our merger; resulting in a significant improvement in our cost to income ratio to 43 percent, down from 46 percent in the same period last year,” said Mr Gachora.
Mr Gachora added that the Group is proud to have the fastest-growing branch network in the country, bringing its services closer to its customers.
“In addition to our investments in modernizing our technology architecture to deliver better customer propositions and to structurally improve our operational efficiency and agility, we have embarked on a bold branch expansion strategy. Since the beginning of the year, we have opened nine branches. We plan to open four more branches by the end of this year,” said Mr Gachora.
Mr. Gachora said he anticipates that the reviewing of Covid -19 curfew restrictions and the ongoing vaccination program across the country will have a tremendous impact in enhancing the health of our communities and restoring the state of our economy.
“We are feeling optimistic that economic recovery is certainly underway and that it will reflect in a continued uplift of our financial performance in the near term,” said Gachora.
Besides new branches opened in Nairobi and Mombasa, NCBA has opened new branches in Nyeri, Karatina, Embu, Ruiru, Kakamega, Bungoma, and Kericho. NCBA has also signed several partnerships aimed at solidifying its strength in asset finance, growing its property finance business, facilitating customer deposits and providing support to SMEs. These include partnerships with Isuzu, DT Dobie, Toyota, Tata, Simba Corp, CMC Motors, Visa, Strathmore, Shelter Afrique, and Buy Rent Kenya.
On citizenship, NCBA through the NCBA Golf Series has sponsored 20 golf tournaments across the country attracting over 2700 golfers. The NCBA Golf Series is the only series where juniors compete on equal ground with other club members and can be overall winners. The Series has also incorporated two dedicated junior golf events. So far, the NCBA Golf Series has produced several junior golf winners who qualified to participate in the Rome Classic and in the Big 5 South African Championship next year.
The US Kids Junior Golf recently accredited the NCBA Golf Series Junior Event as a priority Golf Event – a first in Africa outside of South Africa. This means that junior golfers participating in the event will earn points towards the World Junior Golf Championship.