NCBA Group #ticker:NCBA has posted a 76.9 percent jump in net profit in the six months to June, driven by growth in interest income and a drop in provisions for bad debt.
The bank recorded a profit after-tax of Sh4.66 billion compared to Sh2.63 billion in the same period last year.
NCBA chief executive John Gachora tied the performance to the rebound in the economy following the easing of restrictions to curb the spread of Covid-19.
“Our customers are beginning to see real recovery and are investing in capital projects to grow their businesses. We remain focused on backing their ambitions as we collectively work to emerge from the impact of this pandemic,” said Mr Gachora.
Net interest income grew by 19.7 percent to Sh13.4 billion on gains from investment in government securities amid a contraction of its loan book to Sh239.6 billion as at June 30.
Lending to the private sector is still tightened with banks reporting muted growth on the extension of personal and business loans.
Most banks have preferred to lend to the government through Treasury bonds and bills due to their low-risk status.
Mobile loans
Loan disbursed through Fuliza and Mshwari, mobile loan products in partnership with telecom firm Safaricom #ticker:SCOM, rose to Sh272 billion, representing a 16 percent increase in the period under review.
Its loan loss provisions declined by 22.4 percent to Sh5.9 billion from Sh7.6 billion.
“Our loan impairment charges, which were a lag on performance last year, have greatly reduced,” Mr Gachora said, adding that of the 35 percent restructured loans, representing Sh83.86 billion as at the end of 2020, 82 percent are now performing.
Lower loans provisioning and cut on staff costs following the closure of 14 branches saw operating expenses decline by 3.9 percent to Sh16.3 billion.
It has since opened six new branches this year at the Jomo Kenyatta International Airport (JKIA) in Nairobi, Mwembe Tayari in Mombasa, Karatina, Nyeri, Kakamega and Ruiru towns. The lender also plans to open nine more branches by the end of the year.
The bank declared an interim dividend of Sh0.75 per share to paid on October 12 to shareholders who will be on the register as of September 28.
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