NCBA lent out Ksh.1.25B daily, as half-year profits hit Ksh.9.3B

NCBA Group lent Ksh.457 billion in digital loans last year, even as Tanzania, Rwanda and Uganda markets buoyed the lender’s earnings to hit a profit of Ksh.9.3 billion after tax, the lender has disclosed.

This means that the lender’s disbursement to mobile borrowers averaged nearly Ksh.1.25 billion a day, underscoring the strong demand for mobile-based credit as Kenyans continue to face tough times.

The bank’s disclosures for the year ending June 30, show that the mobile loan uptake went up 35 per cent compared to last year’s; this even as the lender’s provision for credit losses was Ksh.4.4 billion, ostensibly a 21 per cent dip.

The lender has posted a profit after tax of Ksh.9.3 billion in its first quarter ending June 30, 2023, representing a 20.3 per cent increase in earnings compared to Ksh.7.8 billion reported during a similar period last year.

The listed bank registered a profit before tax of Ksh.12.4 billion representing 11 per cent growth, up from Ksh.11.2 billion registered during the first quarter of last year.

Following this growth, NCBA Group Board of Directors has recommended an interim dividend payout of Ksh.1.75 per share, even as assets increased 9 per cent to Ksh.660 billion, with customer deposits hitting a new of Ksh.517 billion for the year.

This means that the bank will spend a total of Ksh.471.8 million in payout to its shareholders, making it the second listed lender at the Nairobi Securities Exchange(NSE) to reward its shareholders during this first quarter of 2023 earnings season.

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

Inflation amid expansion

Meanwhile, the amalgam of NIC and CBA notes that the operating expenses were elevated 24 points year-on-year on the back of inflationary pressures and continued investment in the current five-year strategy that closes next year.

NCBA notes that the half-year earnings were buoyed by new regional subsidiaries in Tanzania, Rwanda and Uganda, which collectively delivered a profit before tax of Ksh.1.4 billion, up from a loss of Ksh.178 million.

The increased earnings, the lender has said, resulted from the turnaround, including the recalibration of the business models and projections.

Mr. Gachora noted that there has been a significant growth in both retail and corporate business, necessitating the expansion by the opening of new branches in Kenol, Murang’a, Chwele, Kahawa Sukari and Eastleigh.

The bank is equally looking into opening branches in Migori, Ruaka and Wote, a move that will see the lender boast of a network of 90 branches across 24 counties in the country, even as it demystifies the closure of banking halls for hand-held banks on mobile.

Last year, NCBA made a net profit of Ksh.10.22 billion, up from Ksh.4.57 billion reported in 2021.

The performance was largely attributed to reduced impairment losses on customer loans as well as advances.