Loan income lifts NBK profit to Sh486m

By JACKSON OKOTH and REUTERS

National Bank of Kenya (NBK) has announced an 11 per cent increase in its pre-tax profit for the first quarter of this year to Sh486.17 million compared with the previous period.

In a statement, the bank cited increased lending for the improved performance.

NBK also profited from a rising customer base as it stepped up service and range of financial products on offer.

"Loans and advances to customers increased to Sh14.6 billion, a 50 per cent increase compared with the first quarter of 2009)," the bank said.

Ranked as the tenth largest bank by asset value, the company said in its unaudited financial statements that its assets grew to Sh56.37 billion, up from Sh44.57 billion, while customer deposits were up by 38 per cent to Sh45.27 billion.

"I consider this a good beginning for the year, and look forward to a better performance in the second quarter," Managing Director Reuben Marambii said.

Local banks have been posting gains in earnings for the first quarter, showing resurging confidence boosted by a positive outlook this year for east Africa’s largest economy.

NBK said its total operating income rose to Sh1.48 billion from Sh1.31 billion, while total operating expenses stood at Sh992.14 million compared with Sh875.05 million in 2009.

Tussle between shareholders

This sterling performance by NBK is happening when there is a tussle between key shareholders on how to privatise the bank. The privatisation commission of Kenya is yet to reach a decision on the issue.

Although the Cabinet gave its approval to sell part of its stake in NBK, a final decision has not been made with the National Social Security Fund(NSSF), a major shareholders standing on the doorway.

The Government holds a 22.5 per cent stake in NBK, while NSSF has a 48 per cent.

In a lengthy restructuring process, NBK has shed off its non-performing loans overload and has been modernising its operations to remain afloat in a robust and competitive banking business.