NBK posts US$1.7m profit before tax for the first year of 2020

KENYA – National Bank of Kenya (NBK), a commercial bank, has posted KSh186million (US$1.72m) in profit before tax for the first half of the year ending June, representing a 62 percent increase from a similar period last year.

The Bank’s performance, despite the effects of the COVID-19 pandemic, was driven by a growth in the loan book and enhanced returns from investments in government securities.

However, profit after tax reduced from KSh107 million (US$0.99m) to a loss of KSh381 million (US$3.52m) due to a one-off tax adjustment after the recent change in corporate tax.

“We remained resilient during the first half of the year, despite the slowdown occasioned by the pandemic. We are replacing non-performing loans with quality ones; and constantly innovating to align with current realities,” said Paul Russo, the NBK Managing Director.

“We are focused on delivering valuable partnerships and solutions to our customers. These efforts are bearing fruit as demonstrated by a recent survey of customers, whose overall feedback was appreciation for our dedication,” added Russo.

The Bank’s total operating income for the period grew by 12 percent to KSh4.3 billion (US$39.68m), driven by increased interest and non-interest income.

Following the bank’s waiver on charges for transactions on digital channels, as a measure to mitigate the impact of COVID-19, fees and commissions during the period remained relatively flat. Operating costs were stable on the back of ongoing cost management initiatives.

The Bank’s balance sheet for the period grew to KSh119 billion (US$1.1bn) driven by growth in customer loans and deposits.

Customer deposits rose to KSh99.6 billion (US$919.03m), from KSh91.7 billion (US$846.14m) in a similar period in 2019; with liquidity improving to 50.2 percent from 40.7 percent over a similar period. Loans and advances increased by KSh2.9 billion (US$26.76m) to KSh50.2 billion (US$463.21m).

The Bank’s recovery journey stayed on course during the first half, with the Non-Performing Loans (NPL) shrinking by 12 percent for the period ending June 30, 2020, to stand at KSh28.6 billion (US$263.9m), compared to KSh32.4 billion (US$298.96m) last year.

NBK has taken measures to cushion customers from negative impacts of the pandemic. This includes restructuring customer loans, in addition to suspending listing on the credit reference bureau and waiver of fees charged on use of digital channels.

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