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National Bank issues profit alert : The Standard



National Bank of Kenya (NBK) has issued a profit warning, citing difficulty in recovering bad loans and the cost of restructuring.
The lender said it had impaired charges after realising that initial projections on the value of loans recoverable were not realistic, or the value of collateral was lower than expected.
“NBK earnings for the period ended December 31 will be at least 25 per cent lower due to… increased loan impairment charges beyond initial projections due to a revision of the valuation and values recoverable from the non-performing loan portfolio,” said Company Secretary Habil Waswani yesterday.

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“During the year the group incurred a one-off restructuring cost (voluntary early retirement programme) as part of the wider business alignment. The full benefits will be realised in 2019,” he said.
NBK reported a profit of Sh410 million in 2017 but started 2018 on a bad footing with a loss of Sh278 million in the first quarter, a further loss of Sh282 million by June but recovered to a profit of Sh21.9 million in the three months to September. By the time, the bank was carrying Sh30.8 billion in bad debts out of a loan book of Sh48 billion which means that only Sh17.2 billion was being regularly serviced by borrowers.
NBK has joined Kenya Re,  Unga Group, Crown Paints, UAP, Britam, Sameer Africa, Kenya Power, Bamburi Cement, Mumias Sugar and Sanlam in the list of firms that had a tough 2018 and were left smarting from a huge reduction in earnings.
The year also saw Athi River Mining, Nakumatt Supermarkets and Deacons go into receivership while several corporate bonds were defaulted on.

National Bank of Kenya

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