National Bank of Kenya (NBK) has posted a colossal Sh2.97 billion in loss after tax for the period ending September 30, 2023, which represents a 436 per cent decline over the same period in 2022.

The huge profit decline by NBK comes after the lender lost a bid at the Court of Appeal to overturn a Sh2.2 billion compensation to former Taveta MP Basil Criticos that was awarded by the Supreme Court.

The huge loss has also been attributed to one-off payments for the bank’s staff voluntary early retirement program in the first half of 2023 and an increase in loan loss provisions.

Similarly, Non-funded income went up by 49 per cent year on year to Sh2.5 billion driven by increased revenues in forex trading, digital growth, new financial products as well as strategic partnerships.

The total interest income for Q3 witnessed little change YoY at Sh9.9 billion as interest expense grew 31 per cent to Sh3.9 billion owing to a surge in funding costs on short and long-term deposits in the market.

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At the same time, NBK’s customer deposits increased to Sh116 billion, accounting for a 7 per cent growth over a similar period in 2022 as net loans and advances surged 12 per cent year on year to Sh78.2 billion.

“Despite the challenging market conditions and geopolitical dynamics all of which continue to cause monetary and fiscal pressure, we remained optimistic,” said NBK Managing Director George Odhiambo.

He added: “Commitment to our strategic objectives and focus on prudent risk management, digital innovation, and customer-centricity continue to position us for sustained growth. Our performance in Q3 also underscores the resilience of our business model and the dedication of our team in delivering value to our shareholders and customers."

The MD says NBK is embracing strategic partnerships targeting MSMEs and digital growth and has partnered with The Leadership Group and Ashitiva LLP in a program seeking to empower SMEs in Kenya.

“We are especially focused on continued investment in cutting-edge technology to enhance our digital banking offerings, strengthening our customer relationships by tailoring our innovative products and services to meet the evolving needs of our diverse clientele, achieving balanced and sustainable growth while maintaining a disciplined approach to risk management,” he added.