NIC Bank records HY profit before tax of Ksh 2.92 Billion

NIC Bank Group has reported a pre-tax profit of KES 2.92 billion, for the first half of 2017, compared to Ksh 3.22 billion the prior year.

This marked a 9.3 percent year on year decline, driven by a reduction in lending margins as a result of the Banking Amendment (2016) Act .

Total assets increased to KES 189.5 billion, a 12.1 percent year on year increase from KES 169.1 billion the previous year.

The Bank’s total liabilities closed at KES 156.9 billion driven by a strong growth in customer deposits.  Customer deposits increased by 18.9 percent during the period.

The increase in customer deposits saw the Bank’s loan to deposit ratio reduce to 88 percent, down from 100 percent a year earlier.  The Bank’s liquidity levels as at the end of June 2017 stood at 45.6 percent.

The Group Managing Director for NIC Bank, John Gachora says the Bank’s focus on asset finance during the period was aimed at cementing its position as the market leader in asset finance, in line with its heritage as the Home of Asset Finance.

Non-performing loans remained relatively stable growing from KES 13.8 billion as at December 2016 to KES 14.3 billion as at June 2017, reflecting the challenging operating environment.

The Bank’s cost to income ratio increased to 41 percent  from 35 percent reported a year ago.

This has been impacted mainly by lower total operating income as a result of the interest rate cap introduced in September 2016. Total operating income declined by 10 percent year on year to KES 7.4 billion from KES 8.2 billion while total operating expenses (excluding loan loss provisions) increased year on year in line with the Bank’s strategic move to invest in technology and support branch expansion.