NAIROBI, KENYA: National Bank has issued a profit warning over the difficulty in recovering bad loans and the cost of restructuring.
The lender says it has impaired charges after realising that initial projections on the value of loans recoverable were not realistic or the value of the collateral was lower than expected.
“NBK earnings for the period ended December 31 will be at least 25 per cent lower due to… increased loan impairment charges beyond initial projections due to a revision of the valuation and values recoverable from the non-performing loan portfolio,” said Habil Waswani Company Secretary.
“During the year the group incurred a one-off restructuring cost (voluntary early retirement programme) as part of wider business alignment, the full benefits will be realized in 2019,” he said.
In issuing a profit warning, NBK has joined Kenya Re, Unga Group, Crown Paints, UAP, Britam, Sameer Africa, Kenya Power, Bamburi Cement, Mumias Sugar, and Sanlam as firms that have had a tough 2018 and were left smarting on huge reductions in earnings.
NBK loans have reduced from Sh57.8 billion in September 2017 to Sh48 billion by September 2018.
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