NCBA Group grew its profit for the nine months to September by 2.6 times to race past its 2020 full-year profits on the back of increased income and reduced provisioning for loan defaults.
Net profit rose from Sh2.52 billion to Sh6.52 billion in the review period, being more than the Sh4.57 billion that the lender posted in the year ended December 2021.
The group’s net interest income rose 19 per cent to Sh20.2 billion while non-interest income remained flat at Sh16 billion.
Operating expenses fell by 14 per cent, Sh3.94 billion, due to reduced provisioning for loan defaults as coronavirus-induced economic hardships continue to clear.
Group Chief Executive John Gachora said the improved performance was helped by a conservative approach to credit management amid the pandemic’s disruptions.
“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,” he said.
Mr Gachora said 98 per cent of the value of loans that were restructured during the Covid-19 period is now performing. This, added to improved sentiments in the economy, informed the cut in provisioning for loan defaults from Sh13.4 billion to Sh9.2 billion.
NCBA booked Sh547 million as exceptional costs, which relate to the spending on rebranding following the merger between CBA Group and NIC Group. It spent Sh662 million in a similar period last year.
Most of the rebranding costs have already been incurred but are being amortised over a three-year period, and will therefore reflect in the NCBA books up to end of next year.
source THE STANDARD BUSINESS