NCBA quarter one profit rises to Sh5 billion
Wednesday May 24 2023
NCBA Group has posted a 48.5 percent rise in net profit for the first three months of the year, with earnings increasing to Sh5.1 billion from Sh3.4 billion the previous corresponding quarter.
The lender’s improved performance is anchored on higher interest income, with non-interest funded earnings also rising to Sh7.2 billion from Sh6.1 billion. Foreign exchange trading brought in Sh2.7 billion.
The net interest income increased 18 percent to Sh8.4 billion despite a jump in interest expenses.
The bank spent Sh1.3 billion more to hold customer deposits in the three months, with interest expenses at Sh6.3 billion.
During the quarter, NCBA marked a 7.3 percent growth in accumulated customer deposits, which topped Sh499.7 billion from Sh465.5 billion last March.
Loans and advances to customers expanded to Sh287.2 billion from Sh243.9 billion as the bank continued to move away from its recent loan book attrition, which stemmed from the high churn of its digital loan products.
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The lender’s operating expenses climbed to Sh9.2 billion from Sh8.1 billion, a 12.76 percent growth.
NCBA’s provisions on expected credit losses bucked the trend, falling 22.6 percent to Sh1.95 billion from Sh2.53 billion in March last year.
The lower loan loss provisioning costs were partly supported by an 11.9 percent decline in gross non-performing loans to Sh39.7 billion.
NCBA increased its holding of government securities in the opening quarter to Sh207.1 billion from Sh194.7 billion.
The slower pace of government securities accumulation in contrast to lending to the private sector mirrors an industry-wide trend, which has seen commercial banks restructure their asset portfolios towards increased lending to businesses and households.
At the close of the quarter, the combined growth of government securities investments and the loan book pushed NCBA’s asset base to Sh628.8 billion from Sh587.4 billion in the same period last year.
The bank’s total shareholder funds have, meanwhile, grown to Sh87.9 billion from Sh80.3 billion.