NCBA nine months profit falls by 46pc on higher loans default cover


NCBA nine months profit falls by 46pc on higher loans default cover
NCBA Group Managing Director, John Gachora

In Summary

  • The near halving of earnings is largely attributable to the bank’s increased cover for loan defaults occasioned by riskier borrower profiles.
  • The loan loss provisions topped Ksh.13.4 billion having grown nearly seven times from Ksh.2 billion in September 2019.
  • The significant profit dip has however cut the bank’s earnings per share by 90 per cent to Ksh.1.65 from Sh16 last year.

NCBA bank has reported a 45.7 per cent decline in nine months earnings with profit dipping to Ksh.2.5 billion from Ksh.4.6 billion last year.

The near halving of earnings is largely attributable to the bank’s increased cover for loan defaults occasioned by riskier borrower profiles.

The loan loss provisions topped Ksh.13.4 billion having grown nearly seven times from Ksh.2 billion in September 2019.

The higher default cover pushed NCBA’s total operating costs by 146 per cent to Ksh.28.6 billion from Ksh.10.8 billion last year.

At the same time, the lender’s stock of non-performing loans grew by 163 per cent to Ksh.38.4 billion representing the bank’s growing asset deterioration as posed by the uncertain operating environment.

Nevertheless, NCBA grew its operating income by 85 per cent to Ksh.33.1 billion as both interest and non-interest funded income (NFI) by two fold and 56 per cent respectively.

Meanwhile, NCBA’s asset base expanded by 91 per cent to Ksh.519.2 billion with customer loans expanding by 94 per cent to Ksh.249.6 billion.

The significant profit dip has however cut the bank’s earnings per share by 90 per cent to Ksh.1.65 from Sh16 last year.

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Story By Kepha Muiruri
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