From left: NBK chief finance officer George Kioko Mulwa, managing director and chief executive Wilfred Musau and chairman Mohamed Abdirahman Hassan during the bank's annual general meeting at the KICC on May 19, 2017. PHOTO | DIANA NGILA | NMG
NBK is banking on other income streams such as bancassurance, custody and fund management, as well as fees from use of digital platforms to shore up earnings.
National Bank of Kenya #ticker:NBK has projected a flat growth in its interest income for this fiscal year, attributing the gloomy outlook to the interest rates cap law which has narrowed its profit margins.
Chief executive Wilfred Mutuku Musau said the lender is banking on other income streams such as bancassurance, custody and fund management, as well as fees from use of digital platforms to shore up earnings.
“We look at interest revenue which is affected by interest rate caps almost getting a flat kind of return, which has to be mitigated by earnings from other streams,” said Mr Mutuku after the bank’s annual general meeting on Friday.
“We have reviewed our business model. We’re investing in technology so we can get more transactional revenue,” he said.
NBK’s revenue mix is heavily dependent on earnings from the loan book. Its net interest income was recorded at Sh8.01 billion as at December 2016 while non-funded income from fees, commissions and forex trading was at Sh3.01 billion in the period under review.
“The same challenges facing the industry affect us all. The impact of the interest rate capping law, an evolving regulatory environment and an uneven global economy could hinder growth,” says Mr Musau in the bank’s latest annual report.
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