NCBA Group PLC has registered 51 per cent increase in profit before tax to Sh11.2 billion in its half-year results ending June 30, 2022 compared to Sh7.4 billion reported during a similar period last year.
According to its Managing Director John Gachora, the growth in profitability results is anchored on three key pillars namely; an increase in operating income, strong expense management, and a decline in impairment charges.
“The results reflect the outcomes of the strategic actions that the Group has taken to support customers navigate the current macro-economic environment and a confirmation that the merger is bearing the fruits of its promise,” Gachora stated.
The lender’s assets increased to Sh604 billion, up 11 per cent, while customer deposits increased by 7 per cent year over year to SH 468 billion.
With operational profits of Sh28.9 billion, up 20 per cent year over year, NCBA Group disbursed Sh339 billion in digital loans, a 25 per cent increase to Sh339 Billion from Sh272 billion in 2021. The lender’s saw a 38 per cent drop in total non-performing loans from Sh37.5 billion to Sh28.2 billion.
While the Group saw increases in revenue across the board, non-interest income stood out mainly to better-than-expected foreign exchange revenues.
The Group was the leading earner of foreign exchange income during the period due to a solid client base and its capacity to source, manage risk, and deliver foreign currency.
The Group’s retail expansion is also beginning to pay off, which contributes to the preservation of a manageable cost of capital. The lender, following the merger, has been on an expansion binge since last year, opening 18 branches throughout the region in 18 months.
“Opening of these branches creates job opportunities across the country and helps us take our services closer to the people. We believe that this wider distribution network allows us to contribute directly to the country’s economic growth agenda. The retail expansion is supported by continuous review of our products and services to make them more attractive and problem-solving to the communities we serve” Gachora claimed.
The banker reported a profit after tax of Sh7.8 billion, an increase of 67 per cent from Sh4.7 billion in the first half of 2021.
According to financial figures made public by Nairobi Securities Exchange (NSE), the moneylender’s net interest income increased to Sh14.8 billion from Sh13.4 billion the previous year, resulting in a 67.39 per cent increase in net earnings for the first half of 2022. Gross income rose from Sh7.4 billion to Sh11.1 billion.
“Looking at our results, you will note that we have been deliberate in our effort to drive a diversified business serving a wide spectrum of customers. Our commitment to supporting customers by making it easier for them to access financial solutions underscores our improved Group performance… Through our digital banking partnerships (M-Shwari, Fuliza, Mpawa, MokaSh and MomokaSh), we continue to provide much needed financial relief to many families and small businesses,” affirmed Gachora.
Operating profit before loan loss provisions for the bank was Sh17.5 billion, up 27 per cent from the previous year, and provision for credit losses was Sh5.6 billion, down 6 per cent from the previous year.
Profit before taxes reached Sh11.2 billion, up 51 per cent year over year, but the Nonperforming Loan (NPL) coverage ratio decreased significantly to 62 per cent from 68 per cent in the same time last year.
Gachora noted that the Group continues to have a very positive outlook on the macroeconomic landscape. As a result, the Group will keep making investments in the area and it encourages the natives’ hopes for a prosperous future.