National Bank of Kenya (NBK) has posted Sh1.1 billion in profit after tax for the nine months ending September 2021, representing a whopping 1,126 per cent rise from Sh87 million in a similar period last year.
This huge profit was due to increased income from loan interest and foreign exchange trading and lower loan loss provisions and benefit from change in corporation tax rate to 30 per cent.
“In a period of unprecedented challenges to our business, the banking sector and the economy at large, I am extremely proud of the excellent results that we delivered for Q3. I am particularly happy because of the actions we have taken to support our stakeholders during what has been a rapidly evolving business environment,” said NBK Managing Director Paul Russo.
Russo added, “Despite the ongoing economic impact of COVID-19, our operating income increased 14.4% to close Q3 at Sh7.6 billion. The low levels of credit provisions also resulted in an increase in profit after tax of 1,126 per cent.”
He went on, “This achievement is also attributed to the great teamwork and our strong foundation for long-term business strategy that ensured we remained resilient in the face of a difficult period.”
During the year, NBK’s net interest income grew by 17 per cent from the previous year to stand at Sh6.1 billion.
Interest income grew by 23 per cent to Sh8.9 billion due to increased volumes of loans and advances as well as improved level of recoveries.
The third quarter of the year was marked by a 39 per cent growth in interest paid to Sh2.8 billion on increased customer deposits, from transactions on the revamped digital channels.
Total operating costs, excluding provisions, are at Sh6 billion, a slight increase over a similar period in 2020 driven by increased investments in cybersecurity, strategic bank projects to enhance operational excellence and customer experience like internet and agency banking platforms.
On the balance sheet, total assets grew by 13 per cent to Sh146 billion, mainly from net loans and advances, which were up by Sh12 billion to Sh65 billion.
This was backed up by a growth of 12 per cent customer deposits to Sh115 billion due to increased inflows among existing and new accounts in corporate and retail, including National Amanah – The Bank’s Islamic Banking business, franchises of the Bank.
NBK says it continues to maintain a high liquidity profile of 49.6 per cent placing it in a strong position to continue supporting its customers during the ongoing economic challenges caused by the pandemic.
“Going into the future and more so to enhance business resilience, we will continue to provide innovative value added and cost-effective financial solutions to our customers, striving to exceed their expectations across our network. This should be achieved against a background of a stabilizing macro-economic environment and steady economic growth in the country. I am optimistic that we have established a solid foundation from which we will execute our strategic priorities that will get us closer to our customers wherever they are and enable us to serve them better,” Russo added.