NCBA full-year profit rises to Ksh.10.2 billion

NCBA Group Plc has posted a 121 per cent jump in full-year earnings with its profit rising to Ksh.10.2 billion from Ksh.4.6 billion previously.

Growth in the lender’s profitability is largely attributable to lower costs in the 12-month cycle with the bank’s total operating costs falling by 16.5 per cent to Ksh.33.4 billion from Ksh.40 billion in December 2020.

The trim has been primarily supported by a 37.7 per cent cut to loan-loss provision costs which fell to Ksh.12.7 billion from Ksh.20.4 billion.

At the same time, NCBA has grown its operating income albeit at a slower six per cent to Ksh.49.2 billion from Ksh.46.4 billion.

The growth in income is premised on a 5.9 per cent growth in net interest income to Ksh.27 billion from Ksh.25.5 billion and a 5.7 per cent rise in non-interest funded income (NFI) to Ksh.22.1 billion.

The bank’s trim in provisioning costs is despite a 10.5 jump in gross non-performing loans to Ksh.44.3 billion from Ksh.40.1 billion.

Despite the growth in interest income, NCBA has continued to see a loan book attrition with the net advances falling to Ksh.244 billion from Ksh.248.5 billion.

NCBA has previously tied the slump in loans to its greater disbursements of digital loans which are mostly short-term in nature.

In 2021, NCBA disbursed Ksh.584 billion worth of digital loans, a sum 34.6 per cent greater than Ksh.434 billion digital loans disbursements in 2020.

Subsequent to the profit rise, NCBA board has recommended the payment of a Ksh.2.25 final dividend or a cumulative Ksh.3.7 billion payout.

This takes the bank’s total dividend payments to Ksh.3 per share after it paid out a Ksh.0.75 interim dividend last year.

NCBA’s earnings per share have improved to Ksh.6.21 from Ksh.2.77 after the profit growth.