NCBA Group Plc has posted a 159 % growth in profits for the first nine months of the year ended September 30. According to the lender’s results, net earnings in the group grew to Kes 6.5 billion during the period under review compared to Kes 2.5 billion posted during a similar period last year.
NCBA Group managing director, John Gachora said the strong financial results are early outcomes of the Group’s focus on its strategic initiatives anchored on customer experience and of a steadily improving economic environment.
“Our operating results since the beginning of the year demonstrate that the actions we have taken to strengthen and enhance the Group’s performance are well on track,” John Gachora NCBA Group managing director.
Gross earnings in the listed company tripled during the period under review to Kes 11.1 billion from Kes3.8 billion posted last year. The growth in profitability was attributed to an increase in operating income to Kes 36 billion, driven by higher customer activity and a decline in loan impairment charges of Kes 4.2 billion years over year.
The lender’s assets grew 8% to Kes 563 billion with customer deposits rising 11 % to Kes 447 billion years on year.
NCBA bank disbursed Kes 423 billion in digital loans, a 26 per cent year-on-year increase in line with its digitization agenda. Its operating income also rose 10 per cent to Kes 36 billion.
The lender reported a cost to income ratio of 43 per cent, an improvement from 46 per cent recorded during the same period last year. Operating profit before loan loss provisions of Kes 20 billion, 17 per cent up year on year.
The lender’s loan impairment charges dropped by 31 per cent toKes 9.2 billion during the assessment period attributed to loan repayments as the economy slowly emerge from the Covid-19 crisis.
Even so, Non- performing loans coverage ratio increased to 70 per cent, from 58 per cent in the same period last year.
”Looking at our results, you will note that our loan impairment charges, which were a drag on performance last year, have greatly reduced; 98 per cent of the portfolio that we restructured during the Covid-19 period is now performing,” John Gachora.
He added that the group has also realized cost synergies from the merger; resulting in a significant improvement in cost to income ratio to 43 per cent, down from 46 per cent in the same period last year.
NCBA Outlook and Dividend
NCBA Group said it plans to open four new branches before the end of the year as it seeks to double its network to get “closer to its customers”. The bank said it will set up the brick-and-mortar outlets in Gikomba, Kiambu, Ngong and Naivasha.
NCBA has also signed several partnerships aimed at solidifying its strength in asset finance, growing its property finance business, facilitating customer deposits and providing support to SMEs.
The lender did not declare an interim dividend for the nine months period.