National Bank of Kenya (NBK) reported a profit after tax of Ksh 661.8 million in the first six months of the year, a decline compared to Ksh 717.6 million reported over the same period last year.
NBK Acting Managing Director Peter Kioko attributes the decline to higher loan loss provisions reported during the period, which rose to Ksh 563.4 million.
“Our loan loss provision increased, highlighting the challenging lending environment of a tough economic period. Despite these challenges, the bank’s loan book grew to Ksh 69 billion and customer deposits grew to Ksh 112 billion. We maintained a strong balance sheet; total assets grew by 4pc to Ksh 139 billion,” Peter Kioko.
NBK reported a rise in net non-performing loans, which increased to Ksh 11.1 billion from Ksh 10.8 billion.
Despite a 13% growth in operating income to Ksh 5.8 billion, operating expenses increased by 11% to 4.8 billion, which the lender attributes to increased investments in strategic projects to enhance operational excellence and customer experience.
During the period, net interest income grew by 18% to Ksh 4.8 billion from Ksh 4.0 billion, driven by gross interest income, which grew by 17pc to Ksh 6.8 billion, owing to increased volumes in loans and advances as well as an improved level of debt recoveries.
During the same period, interest expense grew to Ksh 2.0 billion on increased funding requirements of the bank.
National Bank is implementing other internal strategies to raise organic capital, including rigorous bad debt collection and balance sheet growth to boost profitability, ensuring full compliance with the capital ratios.
“We are on a steady growth trajectory and anticipate continued growth by supporting our clients and finding opportunities within the current environment. The Bank has a strong capital and liquidity base to support the growth of the business and especially through our digital offering. Therefore, we have embarked on a calculated strategy towards ensuring that we provide customer-centric and timely solutions to our customer segments,” NBK Acting Managing Director Peter Kioko.
Read also; Peter Kioko Appointed Acting Managing Director of the National Bank of Kenya.
