NCBA registered a profit after tax of Sh5.1 billion, representing 49% growth up from Sh3.4 billion in Q1 2022.
NCBA Group has posted a profit before tax of Sh6.4 billion in its quarter one 2023 results ending March 31, 2023, which is a 32% increase compared to Sh4.8 billion reported during a similar period last year, thanks to an increase in operating income and a decline in loan impairment charges by 23%.
Despite the tough macroeconomic conditions, the lender’s ‘prudent management of credit risk’ has resulted in an improved non-performing loan ratio and a reduced cost of risk.
“These strong operating results are attributable to continued focus on our strategic priorities, growth in customer numbers and improvement in regional entities profitability. Our market-leading forex capabilities have led to an increased customer base and transaction volumes,” NCBA Group managing director John Gachora, said.
As the lender heads into the second quarter, its strategic priorities; become a distinguished brand known for customer experience, scale retail banking to expand distribution, deepen leadership in corporate banking and asset finance, drive digital transformation, and develop a high-performance culture, remain unchanged.
The Group’s regional footprint across five key markets in Africa; Kenya, Uganda, Tanzania, Rwanda, and Ivory Coast has increased the opportunity to be relevant to more customers. All regional subsidiaries are contributing positively to the Group following 2022 turnaround efforts and increasing the Group’s diversification of revenues.
“We have a stable and growing deposit base which indicates our ability to invest and attract more retail and corporate customers by offering a greater superior experience and convenience through a bigger network. Our systematic branch expansion has allowed us to cover 26 counties in Kenya, and we expect 36 in 2023 with a target to add another 10 in 2023, which will enhance job opportunities across the regions we operate in,” said Mr Gachora.
He said the housing initiative of 105% home financing offered by the bank at a 9.5% interest rate with up to 25 years of repayment is aligned with Government commitments to address affordable housing needs and cost of living.
When it comes to asset finance, Gachora said the lender advocates for adoption of innovative solutions that meet the needs of the market. Partnerships signed with Delux Motors and D.Light Ltd, for example, provided unique financing solutions for a growing motor industry that has also embraced sustainable energy-based products.
Digital banking business also put the lender on track – the Group continued servicing over 60 million customers with organized mobile lending solutions through partnerships with Telcos across Africa. In the period under review, the lender maintained its positioning as the most extensive digital banking solutions provider, with Sh223 billion in digital loans disbursements representing a 37% year-over-year growth.
It is also important to note that the lender’s universal business model is bearing fruit. The Group’s Investment Bank, which enables its customers to access a wide variety of investment advice and products, supports a savings culture which has seen year-on-year growth. The digitization of client engagement with NCBA’s unit trust products has facilitated the onboarding of over 5,000 new unit trust customers.
Sponsorship initiative
Over 100 students benefited from its 2023 education sponsorship initiative. Through the “Change The Story programme”, NCBA, with a number of partners, has so far planted over 7 million trees as a corporate response to reforestation which is aligned with the Government’s target to plant 15 billion trees in the next ten years. Its continued investment in the sport of Golf through the NCBA Golf series is another significant milestone in promoting and democratizing the sport and uplifting the social and economic livelihood of communities.
“While the macro-environment remains suppressed for customers driven by rising inflation costs, forex pressure and market liquidity concerns, NCBA Group`s regional employee footprint of more than 3,000 professionals remains committed to deliver financial solutions that help customers navigate the changing microeconomic environment. Additionally, NCBA’s over 27,000 listed shareholders continue showing investor confidence in one of the fastest growing businesses in the region,” Gachora said.
Looking ahead, he added, the business environment is showing signs of slowing down but the Government initiatives are set to create a more predictable environment for investment. Concerns on forex is being addressed through concerted efforts of the Government, the Regulator and the Banking sector. In the short term, the wide margins seen in forex will disappear but this should spur more customer activity.
