The profit represented a marginal drop of 1.8% from KSh6.31 billion (US$63m) from a similar period in 2018 and came as the lender kept the loan book flat at KSh119 billion (US$1.19bn) to avoid piling fresh non-performing loans (NPLs).
“Our digital investments to transform the bank, develop and scale new business models continue apace. This has been positively received by our clients and key client digital adoption measures continue to improve.” He said.
“We have over 70 digital services and products on our mobile app enabling over 80% of transactions to be conducted digitally.”
“This has been positively received by our clients and key client digital adoption measures continue to improve.
“’Close to 90 per cent of our corporate clients are utilising our Straight2Bank platform, and over 20 per cent of Kenya Revenue Authority tax receipts are processed through our real-time Integrated Tax Payment solution.” He added.
The bank’s interest income, however, declined by six per cent to KSh19.1 billion (US$191m), attributed to declining yields and lower average investment in government securities.
Non-interest income, on the other hand, was flat year on year at KSh7 billion (US$70m), impacted by a slowdown in corporate finance, while operating expenses went up 12 per cent on the back of investments in technology, cybersecurity and staff.
“Loans and advances to customers remained flat at KSh119 billion (US1.19bn) compared to December 2018 as we continued to focus on higher-quality asset origination to ensure we grow our balance sheet in a sustainable manner,” said Mr Ngari.
Customer deposits grew modestly to KSh225 billion (US$2.25bn) compared to KSh224 billion (US$2.24bn) in December last year, with gross non-performing loans down eight per cent to KSh19.9 billion (US$199m) compared to December.
The bank’s operating expenses rose by 12% driven by investments in technology, cyber security and staff.
Its net interest income, however, remained flat at KSh7 billion (US70m) due to compressed margins impacted by a slowdown in corporate finance.
The muted rise in costs was supported by 61 percent cut in provisioning for NPLs to KSh728 million (US$7.28m) from KSh1.87 billion (US$18m) in comparative period last year. Gross NPLs closed the quarter at KSh19.9 billion (US$199m), eight percent down from the end of last year.