NBK HALF YEAR PROFIT BEFORE TAX GROWS

Mr. Paul Russo, Managing Director, National Bank of Kenya. [PHOTO - COURTESY]
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National Bank of Kenya (NBK) has posted Kshs. 186million in profit before tax for the first half of the year ending June. This represents a 62% increase from a similar period last year. The bank’s performance, despite the adverse effects of the Covid-19 pandemic, was driven by a growth in the loan book and enhanced returns from investments in government securities.

However, the profit after tax reduced from Kshs.107 million to a loss of Kshs. 381million due to a one off tax adjustment after the recent change in corporate tax.  “We remained resilient during the first half of the year, despite the slowdown occasioned by the pandemic. We are replacing non-performing loans with quality ones and constantly innovating in order to align with the current realities,” said Paul Russo, the managing director.

“We are focused on delivering valuable partnerships and solutions to our customers. These efforts are bearing fruit as demonstrated by a recent survey of customers, whose overall feedback was appreciation for our dedication,” he added. The bank’s total operating income for the period grew by 12% to Kshs. 4.3billion, driven by increased interest and non-interest income. Following the bank’s waiver on charges for transactions on digital channels, as a measure to mitigate the impact of Covid-19, fees and commissions during the period remained relatively flat. On the other hand, operating costs were stable on the back of the ongoing cost management initiatives.

The bank’s balance sheet for the period grew to Kshs. 119 billion driven by an increase in customer loans and deposits. In the same breath, customer deposits rose to Kshs. 99.6billion, from Kshs. 91.7billion in a similar period in 2019. Loans and advances increased by Kshs. 2.9billion to Kshs.  50.2billion.

The bank’s recovery journey stayed on course during the first half, with the non-performing loans (NPL) shrinking by 12%  to stand at Kshs. 28.6billion, compared to Kshs. 32.4billion last year. NBK has taken a number of measures to cushion customers from the negative impact of the Covid-19 pandemic. These measures include restructuring customer loans, suspending listing on the credit reference bureaus and waiver of fees charged on use of digital channels.

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