NCBA Group Posts a Pre-tax Profit of KES 18.2 Billion in Third Quarter of 2022

NCBA Group Posts a Pre-tax Profit of KES 18.2 Billion in Third Quarter of 2022

November 24, 2022: NCBA Group PLC has posted a profit before tax of KES 18.2 billion in its third quarter results ending September 30 th 2022, which is a 65 per cent increase compared to KES 11.1 billion reported during a similar period last year.

The Group registered a profit after tax of KES 12.8 billion representing 96 per cent growth up from KES 6.5 billion during a similar period in 2021. 

Growth in profitability was attributed to increase in operating income by KES 9.5 billion, driven by higher customer activity and a decline in loan impairment charges by KES 0.9 billion.

Key Highlights

 Asset base rose to KES 595 billion, 6 per cent up year on year

 Customer deposits closed at KES 462 billion, 3 per cent up year on year

 The Group disbursed KES 521billion in digital loans, 23 per cent increase year on year in line with its digitization agenda and its commitment to supporting small businesses and individual customers

 Operating income of KES 45.8 billion, up 26 per cent up year on year

 Operating profit before loan loss provisions of KES 27.2 billion, 31 percent up year on year

 Loan impairments charges for the period KES 8.3 billion, 9 per cent down year on year

 Non-Performing Loans coverage ratio at 65 per cent

 Profit after tax of KES 12.8 billion, up 96 per cent year on year

Commenting on the results, NCBA Group Managing Director, John Gachora remarked, “We are delighted to announce these positive operating results for the nine months of this year, which demonstrates the strength of our diversified business model and the progress of our strategic journey.”

Gachora added, “While there has been a return to normal business operations in 2022 post- Covid, the macro-economic environment has been quite challenging. In particular, as a result of the Ukraine- Russia conflict, the inflation rate accelerated to an average 8.67% in Q3 from 7.16% in Q2 putting significant pressure on households and businesses of all sizes. We are immensely proud that NCBA Group has nimbly navigated the inflation challenges while also supporting its customers to continue operating seamlessly during a tightened foreign currency supply period. Our performance is a reflection that the diversity and strength of our business model puts us in a unique position to effectively cushion pockets of our business that are most significantly exposed to macro-economic pressures while unlocking new opportunities for growth.”

Business Highlights

NCBA’s strategic priorities remains unchanged as the Group heads into the fourth quarter:

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.

In Kenya, the Group plans to launch 11 new branches by year end across the country with the most recent additions located in Busia, Utawala, Kenol and River Road. This countrywide expansion plan is intended to get NCBA Bank closer to its customers in order to serve them better.

NCBA Bank has affirmed its commitment to enabling businesses and individuals to have easy and more affordable access to credit.

As part of this commitment, the bank is rolling out an affordable home acquisition initiative.

Through this initiative, aspiring homeowners will be able to access mortgages of up to 105% of the value of the property, with the minimum amount to be borrowed being KES 1Million and an approval within 36 hours upon submission of documentation. The bank has existing partnerships with select developers who are on boarded to increase availability and accessibility of these affordable houses.

Incrementally, Gachora said the bank will continue to contribute to the growth of the Credit Guarantee Scheme (CGS) which seeks to support Micro, Small and Medium Enterprises (MSMEs) in securing credit from formal lending institutions. The Scheme’s objective is to enhance access to affordable credit for MSMEs, who would otherwise be unable to raise the required collateral for such loans, and who also face an uncertain and risky business environment.

NCBA in partnership with Safaricom and KCB continues to be the biggest lender to MSMEs through products such as Fuliza and M-Shwari. As guided by the Central Bank of Kenya, the bank will implement the roll out of the credit repair framework to enable our customers to continue accessing affordable capital to run their Businesses. The framework will include mapping customer journeys, communication, complaints resolution and financial sensitization on borrowing repayment plans. This will be in line with the New Government`s agenda to boost

MSMEs and alleviate their financial constraints.

As part of its sustainability agenda and commitment to addressing the impact of climate change, NCBA earlier this year was the first bank to finance electric vehicles by creating a KES 2 billion fund to finance 5,000 electric vehicles. These funds are already being disbursed alongside ongoing investments in alternative energy solutions.This is in addition to its hallmark sustainability program “Change the Story”, through which the bank has established a 1 million indigenous seedling nursery at Karura forest and contributed to its planting of over 150,000 trees across the country.

“Our purpose is to Inspire Greatness and our business philosophy appreciates that we have a responsibility to act as a good corporate citizen particularly in times of great need in society.

NCBA through the Kenya Bankers Association has committed towards the ongoing Government’s drought relief initiative pegging various areas of the country affected by extreme weather conditions.

 

Awards

In August 2022, NCBA Bank for the third time in a row, was recognized as the Preferred Bank in Asset Finance in the banking category at the Transport & Logistics Excellence Awards.

NCBA was earlier in the year feted as the Best Bank in Kenya 2022 by the prestigious Global Finance magazine.

This year LinkedIn recognized NCBA as one of Kenya’s Top 5 best workplaces to grow your career. LinkedIn Top Companies is a ranking of the 25 companies that are investing in their talent and helping people build careers that will set them up for long-term success.

Other prestigious awards won during the year included: most Preferred Asset Finance Bank in Kenya during the Annual Road Safety Awards 2022; 3rd Best in Customer Experience by Kenya Bankers Association and among Top 10 Most Valuable Brands in Kenya by Brand

Finance.

NCBA Uganda received the Corporate Governance practices in Banks and MDIs Awarded by The Institute of Corporate Governance Uganda in conjunction with Grant Thornton. During the Institute of Corporate Governance Awards Uganda 2022.

NCBA TZ won Best Digital Bank in Tanzania from the Global Banking and Finance Review.

NCBA won Best Financial Services Group East Africa 2022- Global Banking Finance

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