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NBK stock recovers after profit warning

A National Bank of Kenya branch in Nairobi
A National Bank of Kenya branch in Nairobi. FILE PHOTO | NMG 

National Bank of Kenya (NBK) #ticker:NBK shares recorded modest losses during the first half of yesterday’s trading but recovered in the afternoon session to close flat at Sh4.83 at close of trade following Tuesday’s profit warning.

The share by the Nairobi Securities Exchange (NSE)-listed lender touched a low of Sh4.7 at around midday before recovering to close at Sh4.83 after the bank said it expects to post at least 25 percent lower earnings for the year ending December 2018.

The anticipated drop, which the bank attributed to higher loan impairment charges and restructuring costs, means its net profit for the period is unlikely to surpass Sh308 million.

“(This is) primarily due to increased loan impairment charges beyond initial projections due to a revision of valuations and values recoverable from the non-performing loan portfolio,” said the firm in a cautionary statement.

“During the year the group incurred a one-off restructuring cost (voluntary early retirement programme) as part of wider business alignment, the full benefit will be realised in 2019,” it added.

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Poor performances

NBK has in the recent past registered a series of poor performances that has put its survival in a position of uncertainty.

The lender is in the grip of an operational crisis, stuck in a negative liquidity position as at the end of the first nine months of the year even as plans to sell it remain in limbo.

NBK’s nine-month profit dipped by 84 percent to Sh21.97 million owing to reduced lending. Loans and advances to customers dropped by Sh9.9 billion or 17 percent to Sh48 billion compared to last year’s nine month position of Sh57.88 billion.

Treasury has approved for sale of NBK among other two State owned lenders Consolidated Bank (CBKL) and the Development Bank of Kenya (DBK) along with a number of other parastatals.

The plans are, however, yet to take off even after the State sought to hire a chief manager in charge of transactions as it moved to unlock the stalled sale.

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