National Bank’s Customer Deposits Grew to 94.3 Billion Shillings in 2017

National Bank’s customer deposits grew by one percent from 93.9 billion shillings to 94.3 billion shillings on account of customer confidence in the Bank and new products such as diaspora banking, enhanced Natmobile and improved client service.

As a result of growth in customer flows and deliberate rebalancing of the bond portfolio, the Bank improved its liquidity with ratio closing at 36.3 percent compared to 32.6 percent in the previous year.

Net loan and advances reduced by 5 percent over the same period driven by reduced loan volumes. However, the group focused on deployment of effective recovery strategies resulting in a reduction in non-performing loans (NPL) by 3 billion shillings from 27 billion shillings to 24 billion shillings.

Loan provisions declined from 2.4 billion shillings to 0.76 billion shillings benefiting from a reduction in NPL book and improved credit management ensuring minimal negative migration of existing and new book.

Net Interest income for the period was 6.7 billion shillings, a 14 percent drop from 7.8 billion shillings in the previous year mainly due to the effect of interest rate capping law reducing interest earned from loans and advances.

This was partially compensated by an increase in interest earned from government securities and improved funding mix which reduced interest expense by 0.9 billion shillings.

Total operating revenues closed at 9.1 billion shillings compared to 10.6 billion shillings in 2016 representing 14 percent decrease due to the impact of interest capping and lower fees as volumes of new loans dropped.

The total operating expenses declined by 6 percent to 7.6 billion shillings from 8.1 billion shillings over the same period last year due to improved cost management and rigor in operational controls.

As part of the bank’s diversification efforts, revenues from subsidiaries (NBK Insurance Agency Limited and National Trustee Investment Services Limited) grew by 45 percent year on year from 74 million shillings to 108 million shillings.