NCBA Group closed 2024 with a net profit of KSh 21.9 billion, a 1.9% increase from 2023 on the back of a reduction in loan loss provisions and a significant growth in interest income.
- •The profit boost was driven by a strong increase in interest income of KSh 75.7 billion last year, up from KSh 65.2 billion in 2023.
- •The lender recorded returns from customer loans that surged by 28% to KSh 46.5 billion, while investments in government securities fetched KSh 25.6 billion—from KSh 27.2 billion in 2023.
- •Loan loss provisions declined by 40%, gross non-performing loans fell by 16.6%, while loans and advances to customers shrunk by 10.4% to KSh 302.1 bn.
NCBA’s customer deposits have reduced from KSh 579 billion in 2023 to KSh 502 billion last year. Its total assets have also fallen from KSh 735 billion in 2023 to KSh 666 billion in 2024.
Analysts link the yearlong decline in customer deposits, which begun in early 2024, to the “the dual mix of the KES appreciation and higher funding costs.”
“Management had at the release of HY 2024 results stated that the bank was redirecting deposits to wealth management to lower interest expenses in the face of high interest rates,” analysts at Sterling Capital said in a briefing note.
The stronger shilling also meant that the lender’s income from foreign exchange reduced by more than 25% to KSh 6.2bn. The bank has also been reducing its holdings of government securities, with the held to maturity portfolio declining by 16.8% and the available for sale portfolio declining by 2%.
“In terms of capital allocation, we note NCBA has been increasing its allocation toward local banking institutions, a trend we see likely to continue in 2025 as muted credit demand acts as a headwind toward loan book growth,” Sterling Capital analysts say in the 2025 Outlook.
The bank has proposed a final dividend of KSh 3.25 per share, bringing the total payout for the year to KSh 5.50 per share.
