NCBA Bank announces Sh2.4Billion in profit

he global COVID-19 pandemic is expected to impact NCBA’s growth objectives over the next three quarters.

By Steve UMIDHA On May 20, 2020

NCBA Group PLC (NCBA) has recorded a pre-tax profit of KES 2.4 billion for the quarter ending March 31, 2020.

Total operating income for the quarter was KES 10.9 billion and profit after tax was KES 1.6 billion.

On 1 October 2019 NIC Group PLC (NIC) and Commercial Bank of Africa Limited (CBA) completed the merger of both institutions, the transaction was accounted for in accordance with IFRS 3 – Business Combinations.

The Q1 2020 financial statements of the bank are prepared on a prospective basis (a continuation of CBA), representing 3 months performance of NCBA Bank (merged bank); prior year comparatives are those of CBA Bank. The consolidated financial statements are also a continuation of the financial statements of CBA with an adjustment to capital to reflect the legal capital of NIC. The prior year comparatives are those of CBA.

The Group’s fundamentals remained strong in the first quarter of the year with overall positive volume increases, ending the quarter with a total assets base at KES 509.6 billion. The customer base stood at 54 million, deposits stood at KES 390.5 billion, while the net loan book closed at KES 245.9 billion.

The underlying trends of the income statement remained solid, with customer revenue growing, operating costs on the other hand remained stable compared to the last quarter of 2019. The Group continues to pursue integration efficiencies and synergies.

The Group notes the increase in levels of non-performing loans especially in the transport and manufacturing sectors and on the mobile loan portfolio and has taken proactive steps to increase provisions coverage through an increase in its impairment provisions.

The Bank continues to maintain a high liquidity profile of 55% across the network placing it in a strong position to withstand the expected economic downturn as a result of the COVID-19 pandemic.

“The year started strong with promising growth driven by the optimisms in the East African economies, however the COVID-19 pandemic impacted business performance towards the end of the quarter where we saw reduced transaction volumes and credit demand,” said NCBA Group Managing Director, John Gachora.