National Bank of Kenya posts Sh1.1bn net profit

NAIROBI, Kenya March 17-National Bank of Kenya (NBK) has posted a Sh1.1 billion net profit for the year ended December 31, 2021, a 431 per cent increase compared to 2020.

The lender attributed the performance to increased income from loan interest and foreign exchange trading, coupled with lower loan loss provisions.

“Our strong performance was supported by improving the macro-economic environment and improved quality of credit. We maintained a strong balance sheet growth as evidenced by the increase in customer deposits and 21 per cent growth in customer loans and advances,” said NBK Managing Director, Paul Russo.

During the year, net interest income grew by 18 per cent from the previous year to Sh8.3 billion.

This was contributed by interest income, which grew by 26 per cent to Sh12.2 billion due to increased volumes of loans and advances as well as improved level of recoveries.

Operating income increased by 15 per cent to Sh10.2 billion.

The year was also marked by a 47 per cent growth in interest expense to Sh4billion on increased customer deposits, from transactions on the revamped digital channels, increased bank deposits as well as subordinated debt to shore up the capital requirements of the Bank.

Total operating costs excluding provisions stood at Sh7.8 billion, a 7 per cent increase from 2020.

NBK’s balance sheet continued to expand, with total assets growing by 16 per cent to Sh146 billion, majorly from net loans and advances, which were up by Sh12 billion to Sh67billion.

The growth in assets was supported by a corresponding increase in customer deposits by Sh6.7 billion to Sh105.8 billion and deposits from banks by Sh8.1 billion to Sh21.5 billion as at 31 December 2021.

During the year, the parent company KCB Group approved the conversion of subordinated debt (Sh3.45 billion), which was classified as Tier II capital to equity.

The conversion resulted in the Bank complying with regulatory ratios with regards to core capital as at 31 December 2021.

The Bank is implementing other internal strategies aimed at raising organic capital including rigorous bad debt collection and balance sheet growth to boost profitability which will ensure full compliance with the capital ratios.

“We are on a steady growth trajectory and anticipate continued growth by supporting our clients and finding opportunities within the current environment,” said Russo.