NCBA Bank 2020 profit down 41 per cent to Ksh.4.6 billion

NCBA bank has reported a 41 per cent decline in profits covering the year ended in December 2020 to Ksh.4.6 billion from Ksh.7.8 billion in 2019.

The significant profit decline is largely attributable to an increased cover for loan defaults which rose by more than three times to Ksh.20.4 billion from Ksh.6.3 billion.

The rise in provisions costs served to raise the bank’s non-interest costs by nearly twice to Ksh.40 billion from Ksh.20.4 billion.

Nevertheless, NCBA has grown its revenue streams with total operating income closing the period at a higher Ksh.46.4 billion from Ksh.33.7 billion.

This is as net interest income grew by 91.7 per cent to Ksh.25.5 billion while non-interest funded income (NFI) marginally by three per cent to Ksh.20.9 billion.

During the year, NCBA says it restructured customer loans totaling Ksh.78 billion in addition to waived fees on digital lending.

The management of the bank has termed the results as resilient having closed the year with enhanced capital and liquidity covers.

“We have demonstrated financial and operational resilience during this period of intense economic and social strain. The Group has remained focused on a clear action plan, to protect the health and safety of employees and customers in weathering the effects of the pandemic, to prudently manage liquidity and ensure financial strength and safeguard shareholder value,” the bank said in a statement on Monday.

Subsequently, the board of NCBA has shrugged off concerns on dipping profitability to declare a Ksh.1.50 dividend per share payout reversing last year’s decision to award a bonus share issue to shareholders.

The bank had earlier issued a profit warning on the disclosed 2020 earnings as it weighed the effects of the pandemic on operations.