National Bank Strengthens Credit Risk Function to Record Ksh 478Mn Q1 2016 Profits

National Bank has today announced Ksh 478 Million shillings in Q1 2016 profit before tax (PBT), reaping from an aggressive investment in deposit mobilization by management.

While releasing the results, acting Managing Director and CEO Wilfred Musau expressed optimism saying the results “displayed National Bank’s operational resilience achieved following renewed focus in the bank’s 5 year transformation program launched in 2013. “We are coming from a difficult period in quarter one so the National Bank family is very encouraged by this performance. We remain committed as a bank to achieving ‘tier 1 digital bank’ status by 2017,” said Mr. Musau.

National Bank customer deposits grew a stunning 17% at a difficult period from Ksh 85.3bn reported in Q1 2015 to Ksh. 99.4bn, an impressive show of confidence in the bank but loyal customers.

The bank’s revenue grew by 15% with total operating income of Ksh 3.0bn as at 31 March 2016 compared to Ksh 2.6bn reported in similar period in 2015. Net interest income grew YoY by 22% to Ksh 2.3bn compared to Ksh 1.9bn in Q1 2015. This was mainly driven by better margins in the period under consideration.

Buoyed by a raft of cost cutting policies, National Bank recorded a marginal increase in total operating expenses by 4% from Ksh 1.76bn in Q1 2015 to Ksh 1.83bn in Q1 2016.  The Bank’s total assets at Ksh 115.6bn as at 31 March 2015 remained relatively flat compared to a similar period in the previous year. This was lower than the Ksh 125.4Billion recorded end of 2015.

The Bank’s NPLs rose substantially to Ksh 16.9Billion, up from Ksh 6.9Billion in a similar period last year. National Bank has already initiated a raft of strategic measures to manage the Credit Risk portfolio and recover position.   “We have swiftly moved to build a specialized team that set to work around April 2016, when we released the audited full year 2015 results. We are confident that this team along with other measures we have put in place will reverse the growth of our non performing loans portfolio substantially.”

Mr. Musau said the Bank was fully committed to the five year transformation agenda that began in March 2013. The implementation of our transformation program strongly on course despite the changes that have taken place.

Mr Musau thanked National Bank customers for standing with the bank during a difficult period in the quarter noting that the bank is now more committed to the corporate governance principles to ensure proper functioning of the bank.