NCBA Group Net Earnings Drop to KSh 4.5 bn in FY20

NCBA Group PLC has recorded an after tax profit of KES 2.84 billion for the quarter ending March 31, 2021. This was an increase of 74% compared to KES 1.6 billion that NCBA Group posted during a similar period in 2020.

NCBA Bank has recorded a decline in its net profit from KSh 7.8 billion to KSh 4.5 billion at the close of the financial year ended 31st December 2020.

The listed lender attributed the decline to the coronavirus pandemic and containment measures which resulted in the disruption of regular business operations.

“These factors resulted in higher delinquency levels thus necessitating that the Group prudently take significant loan loss impairment reserves, ultimately impacting the profit before taxation,” it disclosed in its audited financial results.

This is the first time NCBA is announcing full-year results as an entity following the successful merger of NIC Group PLC and CBA in October 2019.

Total interest income decreased from KSh 25.5 billion to Ksh 13.3 billion. 

Key Highlights

  • Net operating income of Ksh 46.4 billion, up 38 per cent. 
  • Non-funded income remained a key revenue driver contributing 45% of operating income.  
  • Operating profit before provisions up 37 per cent to Ksh 26.8 billion. 
  • Pre-tax profit of Ksh 4.98 billion, down 56 per cent due to increased impairments. 
  • Profit after tax of Ksh 4.6 billion, down 42 per cent. 
  • Net interest income closed at Ksh 25.5 billion. 
  • Asset base rose to Ksh 528 billion. 
  • Deposits stood at Ksh 421.5 billion. 
  • Net loan book stood at Ksh 248.5 billion. 
  • Non-Performing Loans stood at Ksh 40.1 billion up 19%.
  • Non-performing loan provision coverage 61% up from 56%.

Directors have proposed a dividend payment of Ksh 1.50 per share to be approved at its Annual General Meeting scheduled to be held on 9th June 2021.

 In 2019 it recommended a similar dividend payout but compared to later reversed the decision to conserve liquidity. Instead, shareholders were issued bonus shares in the proportion of one new share for every ten shares held.

Going forward, the lender says it ‘Remains cautious and observant as the Board focuses on the Group’s priorities and continues to assess and realign operations to match the economic environment.”