https://citizentv.co.ke/...-ksh-29-billion-350940/
KCB Group has continued its clean up of the National Bank of Kenya (NBK) books with the lender’s share of gross non performing loans (NPLs) shrinking to Ksh.29 billion.
Acquired in 2019, NBK had been struggling under the weight of loan defaults, a concern that triggered KCB Group to delegate an asset recovery team to aid in the capture of outstanding loans.
The lender’s gross NPLs fell from Ksh.33 billion at the same time last year irrespective of COVID-19 shocks in the year which has deteriorated banking sector assets.
NBK nevertheless booked a reduced Ksh.87.9 million profit from Ksh.376.5 million last year on higher loan loss provisions costs which hit Ksh.619.5 million in the period.
KCB Group Chief Financial Officer says NBK turnaround remains a continuing story irrespective of the tough operating environment.
“NBK is a good story…a turn around story. We are looking to close the year with about Ksh.1 billion in profitability in spite of it being an abnormal year,” he said.
The sentiments echoed by the CFO mirror those given by KCB Group CEO Joshua Oigara in response to queries on the quality of the NBK buy earlier in March.
“Nobody goes to buy a fat cow unless you don’t know how to do business. If you buy a business where the market value has already been exploited, you would be putting shareholder funds to waste. If you are to ask the same question on whether I would still buy NBK, the answer is a yes,” he said.
NBK asset base jumped to Ksh.129.6 billion in the last nine months with net loans to customers growing to Ksh.53.4 billion from Ksh.47.9 billion last year.Meanwhile, the bank’s customer deposits have improved to Ksh.102.6 billion from Ksh.82.7 billion at the same stage in 2019.
Moreover, NBK core capital has hit Ksh.6.6 billion to stay above the Ksh.1 billion regulatory buffer following new capital injection by KCB Group at the end of last year.KCB lure of NBK stemmed from its high accumulation of government accounts which largely feature State and Ministerial Departments and Agencies (MDAs).
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