Kenya’s National Bank issued profit warning on Wednesday, saying its 2015 earnings will fall by at least 25 percent hurt by bad loans.
The bank placed its chief executive officer and five top managers on leave on Tuesday pending an internal audit process and appointed Wilfred Musau to take over daily operations.
“NBK’s non-performing loans portfolio increased towards the end of 2015 which led to a sharp increase in the level of impairment charges,” the bank said in a statement.
“The bank has identified the NPLs and has taken a series of steps to manage recovery of the said positions,” it said.
Share Price dips to an eleven year low
National Bank of Kenya Ltd on Wednesday set a new 11 year low of Kshs 13.00 at the Nairobi Securities Exchange. Over the last one year, the share price is down 45.83%.The bank last year reported pretax profit of 1.3 billion Kenyan shillings, down 28 percent hurt by costs stemming from lay-offs.
Two other Kenyan banks have replaced their top management over the past year. Both Imperial Bank and Dubai Bank were placed under statutory management by the central bank.
“We reiterate that the internal process is not an indictment on the said managers but an opportunity to ensure a fair, transparent and independent audit process,” Mohamed Hassan, chairman of National Bank’s board, said in a statement.
The central bank on Tuesday said it welcomed National Bank’s actions to strengthen the bank while ensuring its operations continued smoothly.
Reuters
