Pesa Nane wrote:lochaz-index wrote:The first bank to bite the Q1 bullet. Major deviation in LLPs saved the bottom line though the NPL figures (gross and net) don't quite tally with the change. Any explanation offered?
Quote:In the period under review, the Group’s net profit was weighed down by provisions taken to support non-performing facilities of a few large corporate customers that were impaired in 2015.
The Group’s overall NPL ratio dropped to 11.3% from 11.4% in 2016, as a result of sustained efforts to improve the quality of its loan book.
During this period, the Group also increased its operating expenses by KES 74m, a 5% change, as it increased its staffing to support the 7 new branches opened over the course of 2016.
Cheers @pesanane. Prior provisions/prudence saved their skin as it put them ahead of the NPL curve. The question now is whether the trend - reduced provisions - is sustainable vis a vis the effect of macro conditions on its loan book going forward.
Impact of the rate caps is conspicuous...despite increasing their loan book, interest income was trimmed by about 19%. This was duly offset by a more vicious reduction of roughly 30% in interest expense - lots of accounts must have been converted to transactional ones - even though the deposits increased marginally.
The main purpose of the stock market is to make fools of as many people as possible.