The National Bank of Kenya (NBK) said its net profit in the nine months ended September slid 76.8 per cent due to a surge in bad loan provisions and expenses.
The NSE listed lender’s profit fell to Sh521 million for the third quarter 2016 from Sh2.2 billion in the same period last year.
The mid-tier lender’s net interest income however grew by 16 per cent from Sh5.7 billion to Sh6.6 billion.
Provisions for bad loans which ate into the lender’s margins nearly quadrupled from Sh586 million to Sh1.9 billion.
NBK’s total operating expenses increased by 37 per cent from Sh5.6 billion to Sh7.7 billion due to what the lender attributed to “prudent provisioning” and increased investment in systems and product innovations.
NBK, which is majority owned by the state through the National Treasury is currently undertaking a transformation programme to return to profitability.