National bank net profit soars to KES1.1 Billion

By Seth Emmanuel

National Bank of Kenya (NBK) posted KShs. 1.1 billion in profit after tax for the nine months ending September 2021, representing a 1126% increase from KShs. 87M in similar period last year.

This was driven by increased income from loan interest and foreign exchange trading coupled with lower loan loss provisions and benefit from change in corporation tax rate to 30%.

“In a period of unprecedented challenges to our business, the banking sector and the economy at large, I am extremely proud of the excellent results that we delivered for Q3. I am particularly happy because of the actions we have taken to support our stakeholders during what has been a rapidly evolving business environment. Despite the ongoing economic impact of COVID-19, our operating income increased 14.4% to close Q3 at KShs. 7.6 billion. The low levels of credit provisions also resulted in an increase in profit after tax of 1126%,” said NBK Managing Director Paul Russo.

Mr. Russo further stated: “This achievement is also attributed to the great teamwork and our strong foundation for long-term business strategy that ensured we remained resilient in the face of a difficult period.”

During the year, net interest income grew by 17% from the previous year to stand at KShs. 6.1 billion. This was contributed by interest income, which grew by 23% to KShs. 8.9 billion due to increased volumes of loans and advances as well as improved level of recoveries. The third quarter of the year was marked by a 39% growth in interest paid to Kshs. 2.8 billion on increased customer deposits, from transactions on the revamped digital channels.

Total operating costs excluding provisions are at KShs. 6 billion, a slight increase over a similar period in 2020 driven by increased investments in cybersecurity, strategic bank projects to enhance operational excellence and customer experience such as Internet and agency banking platforms.

On the balance sheet side, total assets grew by 13% to KShs. 146 billion, majorly from net loans and advances, which were up by KShs. 12 billion to KShs. 65 billion. This was supported by a growth of 12% customer deposits to KShs. 115 billion due to increased inflows among existing and new accounts in corporate and retail (including National Amanah – The Bank’s Islamic Banking business) franchises of the Bank.

The Bank continues to maintain a high liquidity profile of 49.6% placing it in a strong position to continue supporting its customers during the ongoing economic challenges caused by the COVID-19 pandemic.

While reflecting on the 2021 outlook, Mr. Russo added: “Going into the future and more so to enhance business resilience, we will continue to provide innovative value added and cost-effective financial solutions to our customers, striving to exceed their expectations across our network.

This should be achieved against a background of a stabilizing macro-economic environment and steady economic growth in the country. I am optimistic that we have established a solid foundation from which we will execute our strategic priorities that will get us closer to our customers wherever they are and enable us to serve them better.”