NCBA Reports Profit After Tax Of 20.3% To Ksh 9.3 Billion

NCBA Group PLC has posted a profit after tax of KES 9.3 billion in its H1 results ending June 30, 2023, which is a 20.3 percent increase compared to 7.8 billion shillings reported during a similar period last year.

The Group registered a profit before tax of 12.4 billion shillings representing 11 percent growth up from 11.2 billion shillings in H1 2022.

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Key Highlights

• Assets grew to 660 billion shillings, 9 percent up year on year
• Customer deposits closed at 517 billion shillings, 10 percent up year on year
• NCBA Group disbursed 457 billion shillings in digital loans, a 35 percent increase year-on year
• Operating income of 31.0 billion shillings, 7 percent up year on year
• Provision for credit losses was 4.4 billion shillings, 21 percent down year on year
• Profit before tax of 12.4 billion shillings, 11 percent up year on year
• Profit after tax of 9.3 billion shillings, 20.3 percent up year on year

The underlying growth trends in bottom-line profitability remained solid compared to 2022 driven by an increase in operating income and a decline in loan impairment charges by 21 percent.

The Group’s operating expenses were however elevated 24.0 percent year on year on the back of inflationary pressures and continued investment in the current 5-year strategy which comes to a close in 2024.

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While releasing the half-year financial results, NCBA Group Managing Director, John Gachora commented, “These strong operating results are attributable to consistent focus on our strategic priorities.”

The Group`s strong performance enabled the Board of Directors to recommend an interim dividend declaration of 1.75 shillings per share.

NCBA’s strategic priorities remain unchanged as the Group heads into the second half of the year: Become a distinguished brand known for customer experience, scale retail banking to expand distribution, deepen leadership in corporate banking and asset finance, drive digital transformation, and develop a high-performance culture.

The Group`s first half of the year performance was significantly buoyed by the contributions of the regional subsidiaries (Tanzania, Rwanda, and Uganda) which collectively delivered a profit before tax of 1.4 billion shillings (this was a notable improvement from the loss of 178 million shillings posted in H1 2022).

This change in outcomes was a result of the Group’s turnaround strategy which led to a recalibration of the business models in these markets and a right-sizing of the operating models.

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Gachora noted that in Kenya there is continued growth in the core business. Our Retail and Corporate Banking customer deposits have grown on the back of building a bigger and smarter network and offering a superior customer experience.

This year, we have opened branches in Kenol, Murang’a, Chwele, Kahawa Sukari, and Eastleigh with a plan to open Migori, Ruaka, and Wote branches within the month. We now boast of a network of 90 branches across 24 counties in Kenya.”

NCBA recognizes that our license to operate is granted by the communities we serve. Over 3,000 students from Primary, Tertiary, and University institutions have benefited from its 2023 education, mentorship, and financial innovation sponsorship initiatives. Through the environment and natural resources citizenship pillar, NCBA with several partners in Government, private sector, and learning institutions has so far planted over 7 million trees as a corporate response to reforestation.

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NCBA’s investment of over KES 50 million in the sport of Golf through the NCBA Golf series, the Junior Golf Foundation (JGF), and Kenya Golf Union (KGU) sponsorships is a significant milestone in promoting and democratizing the sport and uplifting the social and economic livelihood of communities.

Most recently, at the World’s largest Junior Golf event attended by 55 countries and held in Pinehurst USA, Kenya was proudly represented by 12 junior players across various age categories courtesy of JGF, who qualified through an NCBA-sponsored golf tour.

Gachora pointed out that while the macro-environment remains challenging, particularly rising inflation and forex pressure,  NCBA Group`s regional employee footprint of more than 3,000 professionals remains committed to delivering financial solutions that help customers navigate the changing microeconomic environment. He further noted that a resilient and strong banking sector performance will support credit availability for customers in both the private and public sectors, which will in turn boost investment and tax revenue for the nation.

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