NCBA Records 124% Jump in Net Profits to Kshs.10.22 Billion

NCBA Group PLC has registered a growth in net profits of 10.22 billion shillings, a 124 percent increase from the 4.57 billion shillings reported in 2020.

The bank’s impressive growth was attributed to an increase in operating income of 2.7 billion shillings and a significant decline in an impairment charge of 7.7 billion shillings. Profits before tax stood at 15.03 billion shillings.

The results posted by NCBA reflect the bank’s commitment to delivering on its strategy despite the headwinds induced by the Covid-19.

NCBA’s total assets grew by 63.1 billion shillings to close at 591.1 billion. During the period under review, customer deposits grew by 11 percent to 469.9 billion shillings.

The loan book marginally dropped to 244 billion shillings from 248.5 billion shillings in 2020. This reduced lending explains a slight drop in interest income from loans and advances from 26.7 billion to 25.5 billion shillings.

“We remain well capitalized with core capital at 70.9 billion shillings and have robust liquidity of 61.7 percent. This foundation has allowed us to continue serving our customers effectively throughout the pandemic,” said John Gachora, Group Managing Director.

The Group disbursed 584 billion shillings in digital loans, a 35 percent increase year on year according to its digitization agenda.

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Following the trend of the other banks that set high loan-loss provisions in 2020, NCBA reduced its loan-loss provision from 20.4 billion shillings to 12.7 billion shillings, as lending activities reduced.

Regarding the operating income, the Group posted a 6 percent year-on-year increase from 46.4 billion to 49.2 billion shillings. On the other hand, loan impairment charges dropped 38 percent in 2021 to 12.7 billion shillings as the Non-Performing loans coverage ratio increased to 73.6 percent, from 60.9 percent in the same period last year.

For 2021, the NCBA Board has recommended a final dividend of 2.25 shillings a share coupled with the interim dividend paid of 0.75 shillings per share. This brings the total dividend for the year 2021 to 3 shillings per share.

The dividend will be payable to the shareholders registered on the Company’s register at the close of business on 13^th April 2022 (closing date for determination of entitlement to dividend).

In the meantime, the bank looks at deepening its corporate and asset finance in 2021 and digitizing its operations more as it looks to deliver better to its customers. The Group is looking at opening more branches while continually consolidating banks near each other.

“NCBA has successfully adjusted to a new normal in this Covid-era. Our business is more resilient than ever before and is on a strong path for growth. I am very excited that our branch expansion and digitization plans make us more relevant to a wider base of customers and enable us to serve them better,” concluded Mr. Gachora.