National Bank of Kenya has bounced back to profitability after recording a profit before tax of 182 million shillings for the period ending 31 December 2016.
According to the statement released by the institution, the 182 million profits marked a 100 percent increase in profits compared to 2015 which stood at a loss of 1.6 billion shillings in what has been attributed to better management of cost of funds and increased volumes from clients.
The business grew interest income to 12.3 billion shillings from 12.2 billion shillings in the same period 2015, representing 1 percent increase. Interest expense declined 27 percent from 5.9 billion shillings to 4.3 billion shillings this year due to shift in funding mix from expensive deposits.
Total operating expenses on the other hand increased by 9 percent to 8.1 billion shillings from 7.4 billion shillings over the same period last year. The increase in expenses was due to investment in new systems as part of automation and innovation combined with costs of new branches set-up last year.
Net customer loans and advances were down 12 percent from 67 billion shillings to 59 billion shillings due to reduced lending activity and impact of provisions recorded against NPL book. The bank is in the process of raising term funding in Q2 2017, this is expected to further boost loan growth.
Commenting on the full year results of the bank, National Bank of Kenya Chief Executive Officer Wilfred Musau said that the business is still exhibiting healthy growth.
“Our focus on delivering value to our customers continues to be a key objective in our underlying businesses,” said Mr. Musau.