NCBA Reports An After-tax Profit of Ksh 2.84 Billion In Q1

NCBA Group PLC has recorded an after-tax profit of KES 2.84 billion for the quarter ending March 31, 2021. This was an increase of 74% compared to KES 1.6 billion that NCBA Group posted during a similar period in 2020.

“We are immensely proud of our strong financial results during the first quarter, NCBA Group has demonstrated the ability to tightly balance strong credit discipline with its commitment to support its customers during this period,” said Mr. NCBA Group Managing Director, John Gachora.

In Q1 2021, total assets increased to KES 542 billion, representing a strong growth of 6% year on year. Customer deposits in the period also increased by 11% year on year fuelled by strong business development efforts that have attracted new customers to the Group.

Net interest income recorded a 20% increase year on year due to growth in interest income from treasury investments and a reduction in interest expense following the retirement of NCBA Group’s medium-term note in Q3 2020.

The overall effect was that operating income in the period closed at KES 11.8 Billion representing 8% growth against prior year performance.

The company gross loans stood at KES 283 billion, representing 2% year-on-year growth in all banking subsidiaries. Digital bank disbursements, however, increased significantly by 26% to KES 134 billion from KES 108 billion during the same period.

This is in line with NCBA Group’s digitization agenda and its commitment to supporting small businesses and individual customers during this period.

NCBA Group’s non-performing loan ratio stands at 13.99% in line with industry-wide levels given the impact of COVID-19. In Q1 2021, NCBA Group further built its credit impairment coverage to mitigate against continued adverse impact, improving the NPL coverage ratio to 65% from 54% in the same period last year.

Additionally, NCBA Group’s concerted recovery efforts, particularly in the digital lending business have begun to bear fruit in stabilizing the credit portfolio.

NCBA Group’s capital and liquidity levels remain very strong, with liquidity at 58.7% and Total capital / Total risk-weighted assets at 18.34%. Both indicators are well above the required regulatory thresholds and place the group in a strong position to withstand the current economic downturn triggered by the COVID-19 pandemic.