National Bank of Kenya Issues Profit Warning

The National Bank of Kenya has issued a profit warning for the financial year ended December 2018 further diminishing hopes by shareholders to get a dividend from the lender.

NBK says it expects its earnings to be lower by 25 percent compared to the previous year where the profits stood at 308 million shillings.

In a statement, the lender says the anticipated drop in earnings is “primarily due to increased loan impairment charges beyond initial projections due to a revision of valuations and values recoverable from non-performing loan portfolio.”

National Bank had been in a series of loss-making in the past but had shown some hope when it registered an increase in profits by 190 percent in 2017.

During the first 9 months of 2018, NBK’s profit dropped by 84 percent to 21.97 million shillings on what was attributed to “reduced lending” and the interest capping law.

National Social Security Fund (NSSF) owns the largest stake in NBK at 48.1 percent with the National Treasury owning 22.5 percent. The remaining shares are owned by the public.

The government is in the process of disposing of off NBK to private owners together with two other lenders/ Consolidated Bank (CBKL) and Development Bank of Kenya (DBK). The lender’s core capital has dropped from 9 billion shillings in September 2017 to 2.34 billion shillings in September 2018.