National Bank in pre-tax profit as State promises to inject Ksh.4.2B capital
- The announcement comes on the backdrop of the bank announcing a pre-tax profit of Ksh.785 million in the financial period ending December 31, 2017.
- Customer deposits grew by one per cent in the period, while revenues from the insurance and trustee services subsidiaries grew 45 per cent year on year from Ksh.74 million to Ksh.108 million.
National Bank of Kenya is expected to receive a Ksh.4.2 billion capital injection from two of its leading shareholders
The funds, to be disbursed by the National Treasury and the National Social Security Fund (NSSF) as subordinate loans will be released within six months.
In a statement, CEO Wilfred Musau said the additional capital will help the lender regain its footing in the market.
“The capital injection will unlock and bolster the key pillars of our growth going forward,” said Musau.
Capital adequacy ratio has been the bane of the bank’s operations following years of poor performance.
The announcement comes on the backdrop of the bank announcing a pre-tax profit of Ksh.785 million in the financial period ending December 31, 2017.
This signifying a 190 per cent growth in its profits from Ksh.79.8 million it recorded in 2016.
During the period under review, Net Interest income however registered a 14 per cent drop to Ksh.6.7 billion from Ksh.7.7 billion same period previous year. This it attributed mainly to the effect of interest rate capping law.
As a result of the rate caps, the bank also recorded a decline in operating revenue to Ksh.9.1 billion from Ksh.10.6 billion it recorded in the previous financial year.
Total operating expenses in the period also declined by 6 per cent to Ksh.7.6 attributed to cost management in the year that included staff rationalization.
Customer deposits grew by one per cent in the period, while revenues from the insurance and trustee services subsidiaries grew 45 per cent year on year from Ksh.74 million to Ksh.108 million.
“We made strategic strides in addressing NPL’s, cost management, improving operational efficiency and leveraging on technology to deliver solutions to customers,” noted Musau.
Going forward, the bank says the capital injection by the government will see it focus on customer solutions as well as mitigate market risks.
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