Kenya's National Bank 2014 profit hit by retrenchment costs

National Bank of Kenya's pretax profit fell by 28 percent to Sh1.3 billion last year despite higher net interest income after it incurred costs while paying staff who were being laid off.

National has been going through a revamp which has included job cuts to reduce overall costs in an effort to reclaim its position as one of the country's top three lenders after losing it in the past due to poor management.

Munir Ahmed, the lender's chief executive, said on Wednesday some staff had been redeployed to 25 new branches opened last year to reduce overall costs.

"We have supplemented that with the voluntary retirement for 190 staff where we paid 1.1 billion shillings," he told Reuters after an investor briefing.

National's pretax profit before accounting for the exceptional costs of cutting the jobs was 2.43 billion shillings, buoyed from the previous year by growth in net interest income and transaction fees.

Net interest income rose 21 percent to Sh6.79 billion while fees and commissions accounted for a net income of 2.13 billion shillings, up a third from the previous year.

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