NCBA Group PLC managed to post a profit of Sh11.2 billion before tax in its half-year results that ended on June 30th 2022, which translates to a 51 percent increase compared to Sh. 7.4 billion reported in 2021.
The Groups Managing Director (MD) John Gachora said after tax the Group registered a profit of Sh.7.8 billion representing 67 percent growth up from Sh. 4.7 billion in half year 2021 in profitability which he attributed to an increase in operating income, strong expense management and a decline in impairment charges.
Speaking on Monday during the release of NCBA Half Year Results at a Nairobi hotel, Gachora singled out inflation, geopolitical tensions and Covid 19 pandemic as some of the factors that affected the Bank’s overall performance and operating environment during the period under review.
Gachora said that the Group rolled out 15 seconds pre-conditional approval on asset finance through which customers are able to get indicative approvals within 15 seconds of completing an online application.
“Through our digital banking partnerships namely M-Shwari, Fuliza, Mpawa, Mokash and Momokash, we continue to provide much needed financial relief to many families and small businesses,” he stated.
Gachora noted that Inflation in the country is at a high of 8.3 percent which is outside the comfort zone as defined by Central Bank of Kenya which is 5 percent plus or minus 2.5 percent.
In his remarks, NCBA Group Director Finance, David Abwoga disclosed that the government securities investment at Sh222 billion contributed significantly to the net interest income of about Sh2.6 billion which he attributed to the rising interest rate, liquidity and deposits.
He at the same time noted that Non Funded Income increased by 33 percent a total of 14.2 billion thereby contributing 50 percent of the group’s net income for the first half driven by fees and commissions on lending which was supported by an increase in digital loans that saw the bank disburse Sh339 billion.
Abwoga stated that Non-Performing Loans (NPL) coverage ratio declined slightly to 62 percent from 68 percent in the same period last year.
“Operating income of Sh28.9 billion, was up by 20 percent year on year while the customer deposits closed at Sh.468 billion a 7 percent up year on year,” he stated.
Abwoga also stated that the provision for credit losses was at Sh5.6 billion, a 6 percent decrease on the year attributed by recovery, NPL resolutions and supporting customers through Covid-19 pandemic.
During the period NCBA prides itself as the first bank to finance electric vehicles as part of its green strategy by injecting Sh2 billion in asset finance, a move that the bank says will bolster its asset quality and support government’s effort to reduce carbon emissions in the country.
NCBA Group also launched an ambitious branch expansion agenda last year which has seen it open 18 branches across the region in its subsidiaries in Kenya, Rwanda, Uganda, Tanzania and Cote d’Ivoire in the last 18 months.
In the year 2022, the Group has opened four branches in Busia, Utawala, Kenol and River Road and plans to open seven branches by the end of the year.
By Rita Muthoni and Lorna Mukami