NCBA’s full-year net profit for the year 2020 nosedived by 42% to Kes4.6 billion as the bank ramped up its provisions for loan losses. The tier-one lender put aside Kes 20.4 billion to cover expected loan losses caused by the loan relief introduced by the government as a method to cushion the economy from the effects of the COVID-19 pandemic, compared to Kes 6.25 billion set aside in 2019.
The bank’s revenue from net interest income shot up by 91% to Kes 25.5 billion at the end of 2020, from Kes 13.3 billion at the end of 2019. Non-interest income rose by 3% to Kes 20.9 billion from Kes 20.3 billion during the same period in 2019.
NCBA, which targets small and medium-sized enterprises, said that it disbursed over Kes 432 billion in digital loans, thereby helping small businesses to cope with the coronavirus pandemic.
The bank also gave loan moratoriums and restructured loans for borrowers affected by the pandemic.
“The Group granted loan moratoriums and restructured loans amounting to over Kes 78 billion to corporate and retail customers as at the end of December 2020,”said the bank
Customer deposits rose to Kes 421.5 billion in 2020 from Kes 378.2 billion in 2019 as the lender digitized its operations. “NCBA upgraded its M-Shwari digital platform, drastically improving transaction capacity for its 35 million Kenyan customers. The Group plans to roll out the technology in Uganda, Rwanda, Tanzania and Ivory Coast in 2021,” the lender said.
Loans and advances to customers decreased slightly to Kes 248.5 billion compared to Kes 249.4 billion a year earlier. NCBA’s bad loans grew to Kes 40 billion at the end of 2020, from Kes 33.7 billion in 2019.
During the results announcement, NCBA revealed plans to scale its retail banking business and provide exceptional customer experience to over 35 million customers spread throughout the East African region.
NCBA board of directors recommend a final dividend of Kes 1.50 per share.