National Bank Poor Performance Attributable to Increased Loan Provisioning

Lackluster Performance and New 52-Week Low; Hit National Bank

As the month of March came to a close, some slight improvement was observed across the equities market, with the NSE-20 share index appreciating by 0.02% to close at 3982.09 points while the NASI gained 0.57% to 147.44 points. The NSE 25 Share Index was on a similar trajectory, edging up by 0.33% to close at 4261.05 points. Market capitalization expanded further by 0.57% to KES 2.078Tn whilst equity turnover surged by 18.13% to KES 603.72Mn. The market breadth illustrated some improvement, perching at 1.00x from 0.46x, with the number of decliners and advancers at par.

Following the issuance of a profit warning announcement yesterday, National Bank of Kenya (NSE: NBK) today announced an astounding full year loss of KES 1.2Bn, a dip from an after-tax profit of KES 870.70Mn, making it the worst performance seen from the listed bank entities. The pitiable performance was heavily attributable to increased loan provisioning from KES 525.3Mn to KES 3.72Bn as a result of a worsening loan quality. Interest expenses grew by KES 2Bn to KES 5.9Bn, on account of a 41.1% rise in customer deposits. This also came in the wake of the chief executive and other directors being send on compulsory leave paving way for audit to be carried out. The stock has been on a downward trajectory, setting a new 52-week low of KES 8.00 during today’s trading session.

Equity Market Highlights

Safaricom Ltd (NSE: SCOM) was the most actively traded stock today accounting for 18.95% of the total market value traded activity. KenolKobil Ltd (NSE: KENO) also registered robust levels of activity, accounting for 17.96% of the total market turnover.

Pan Africa Insurance Holdings Ltd (NSE: PAFR) capped the gainers chart, jumping up by 8.22% to close the day at KES 39.50. Stanlib Fahari I-REIT Ltd (NSE: FAHR) gained by 5.88% to close the day in second place at KES 22.50.

Marshalls (E.A.) Ltd (NSE: MASH) was the top loser for the day, declining by 9.78% to close at KES 10.15. Barclays Bank of Kenya Ltd (NSE: BBK) lost 7.44% to close at KES 11.20.

Article by Genghis Research.