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NCBA Bank pumps over Sh2b into its regional subsidiaries

By Patrick Alushula | Apr 26th 2022 | 2 min read
By Patrick Alushula | April 26th 2022
NCBA Group Managing Director John Gachora (right) and Director Finance David Abwoga at a past event. [David Njaaga, Standard]

NCBA Group last year added Sh2.3 billion into regional subsidiaries, being double what it injected in 2020 as it eyes increased business.

The lender’s latest annual report shows investment in the three subsidiaries - Tanzania, Uganda and Rwanda increased by Sh2.33 billion last year compared with Sh1.14 billion additional investment in the preceding similar period.

Tanzania topped with Sh978 million in fresh investment, which was a rise from the Sh300 million that NCBA had invested in 2020.

Investment in the Ugandan unit rose from Sh450 million to Sh777.41 million, while that of Rwanda was Sh578.85 million compared with Sh390 million in the previous year.

“In Rwanda, the investment was for regulatory purposes. The National Bank of Rwanda increased capital requirements for banks, and so we continue to recapitalise the unit,” said Group Managing Director John Gachora.

“The investment in Uganda and Tanzania is so that we are able to take on increased business,” added Mr Gachora.

The additional capital injection raised the value of the investment in the three subsidiaries to Sh12.05 billion, with Tanzania leading with Sh5.08 billion. NCBA values the investment in Uganda and Rwanda units at Sh4.13 billion and Sh2.84 billion respectively.

NCBA Group last year added Sh2.3 billion into regional subsidiaries. [Elvis Ogina, Standard]

The additional capital injection came during the period net losses from subsidiaries increased, underlining the continued reliance on the Kenyan unit for the group’s profits.

While the Kenyan unit saw its net profit jump from Sh5.6 billion to Sh11.8 billion, the net loss from the Tanzanian unit widened from Sh770 million to Sh1.16 billion.

Net loss from Ugandan operations, on the other hand, rose from Sh125.9 million to Sh483.24 million. Only the Rwandan unit improved from a Sh107.49 million loss to a net profit of Sh83.4 million.

NCBA also has Sh3.96 billion investments in three associates - CBA Mutuya Property Group, AIG Kenya Insurance and Bridge Microfinance — with stakes of 23.34 per cent, 33.33 per cent and 35 per cent respectively.

The group’s share of profit from the three associates fell from Sh157.88 million to Sh89.49 million.

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