NCBA Group has posted a 77 percent increase in net earnings for the year ended June 30.
The group made Ksh.4.7 billion in the period under review compared to Ksh.2.6 billion made during the same period last year.
The bank’s total assets grew 5.6 percent to Ksh.542 billion as customer deposits jumped 12 percent.
However, the group’s loan book dropped by 3.5 percent with loan loss provisions also falling by 22.4 percent.
At the same time, NCBA directors have approved payment of an interim dividend of Ksh.0.75 for every ordinary share of five shillings held.
According to the company, the interim dividend will be payable to the shareholders on or immediately after October 12, 2021.
Commenting on the results, NCBA Group Managing Director, John Gachora attributed the growth to the country’s improving business and economic environment and the Group’s strategic initiatives anchored on customer experience.
The period under review saw an increase in operating income by Ksh.2.8 billion that was driven by higher customer activity and a decline in loan impairment charges by Ksh.1.7 billion.
“Operating profits really measures how business is growing so being up 16 percent year over year means that the actual business is growing at such a rate,” said Gachora.
Despite NCBA Group’s Gross loan book going down, digital loan disbursements went up by 12 percent to Ksh.272 billion as did customer deposits by 16 percent to Ksh.437 billion this year.
During the same period, NCBA which is a merger of NIC Group PLC and CBA has seen its assets rise by 6 percent to Ksh.542 billion with the group now aiming to reach the 1 trillion mark.
“Whereas historically we’ve seen asset finance growth being driven by large corporations that are buying heavy transport vehicles. What we’re seeing now is that a lot of the growth is coming from SMEs buying small trucks leading to good growth that we have seen there.”
Gachora is optimistic the Group will make more profits with the ongoing roll-out of the vaccination program across the country. Over the last year, NCBA restructured 35 percent of their credit portfolio and 82 percent of the restructured portfolio is now performing.
NCBA Group Board of Directors approved payment of an interim dividend of Ksh.0.75 for every ordinary share of Ksh5 held by shareholders
Gachora also hinted at relaunching the Stawi program that was affected by the onset of the current global health pandemic that slowed its uptake.
“Banks are still very strongly willing to support those businesses. What we’ve encouraged banks is to also do that program on their own platforms lending on their own platforms but Stawi is there and it has very good support from the government and I am hoping when things turn, we will relaunch.” Gachora
The program offered through NCBA, KCB, Co-op Bank and DTB was designed to give quick credit ranging from Sh30,000 to Sh250,000 for one year at a nine percent interest rate to small businesses.
