NCBA half-year profit hits Ksh.4.7 billion after opening six branches

NCBA Group has reported an 81 per cent growth in its half-year profit to Ksh.4.7 billion from a lower Ksh.2.6 billion a year ago.

The remarkable growth in profitability for the bank is largely attributable to reduced operating expenses in the six months, mostly a factor of lower loan-loss provisions.

NCBA’s total operating expenses have come down to Ksh.16.3 billion from Ksh.17 billion with credit impairment charges falling by 22.4 per cent to Ksh.5.9 billion.

Staff costs for the lender only rose marginally to Ksh.3.9 billion from Ksh.3.5 billion.

“One of the questions many have asked is synergies from our recent merger. On a normalized basis, our costs are down. We are starting to see the merger bearing fruit,” said NCBA Managing Director John Gachora.

NCBA has further continued to register significant organic growth with total operating income up 13.1 per cent to Ksh.24.1 billion in the period.

The lender’s net interest income was up 19.6 per cent at Ksh.13.4 billion while non-interest funded income (NFI) rose 5.9 per cent to Ksh.10.7 billion.

During the six months, NCBA asset base has expanded to Ksh.542.6 billion despite a marginal contraction in its net loans and advances to customers at Ksh.239.6 billion.

Over the same period, NCBA has opened six branches at JKIA, Mwembe Tayari market in Mombasa, Karatina, Nyeri, Kakamega and Ruiru.

The bank plans to open an additional nine branches by the end of 2021 in what is a reversal of closures that saw 14 of its outlets shut down in 2020 on the backdrop of the NIC, CBA merger that birthed NCBA.

“Being the third largest bank in Kenya, we need to be relevant and more available and closure to your pockets and wallets. People still want to know where your branch even when they haven’t been in one for the last year. When things go wrong, customers need to know that they can walk somewhere and have their problem assessed,” added Mr. Gachora.

NCBA has continued with post-merger process which sees it continue to evaluate its network and merge systems.

“Our merger journey is fairly a long journey. We took some very quick decisions to bring our systems and customers together but we have very many systems, some of which we are still to phase out. You change things as you go along. You don’t want to give too many changes to the customer at once as they may not take them.”