The Taxman Changes NBK's Profit to a Loss
Kevin Namunwa  |  Aug 13, 2020
       

The National Bank of Kenya (NBK) has posted a loss of Ksh 381 million after tax. Before tax, NBK has actually recorded a profit.

The lender announced a Ksh 186 million profit before tax for the first half of the year ending June 30th 2020. The profit before tax, represents a 62% increase as compared to the previous year’s results.

The bank’s performance, despite the effects of the COVID-19 pandemic, was driven by a growth in the loan book and enhanced returns from investments in government securities.

NBK Managing Director, Paul Russo, said that the bank remained resilient during the first half of the year despite a slowdown in the economy occasioned by the Coronavirus pandemic.

Russo added that the bank is focused on delivering valuable partnerships and solutions to its customers.

“These efforts are bearing fruit,” he added, “as demonstrated by a recent survey of customers, whose overall feedback was appreciation for our dedication.”

Despite the lender recording a loss after tax, the bank’s general performance has improved ever since it was taken over by Kenya Commercial Bank. Th


The lender’s total operating income for the period grew 12% to Ksh4.3 billion, driven by increased interest and non-interest income.

Due to the bank’s waiver on charges for transactions on digital channels, as a measure to mitigate the impact of COVID-19, fees and commissions during the period remained relatively flat. Operating costs were stable on the back of ongoing cost management initiatives.

NBK’s balance sheet for the period grew to Ksh 119 billion driven by growth in customer loans and deposits. Customer deposits rose to Ksh99.6 billion, from Ksh91.7 billion in a similar period in 2019; with liquidity improving to 50.2% from 40.7% over a similar period. Loans and advances increased by Kshs. 2.9billion to Kes 50.2billion.

The bank’s recovery journey stayed on course during the first half, with the Non-Performing Loans (NPL) shrinking by 12% for the period ending June 30, 2020 to stand at Ksh28.6billion, compared to Ksh32.4billion last year.

NBK has taken measures to cushion customers from negative impacts of the pandemic. This includes restructuring customer loans, in addition to suspending listing on the credit reference bureau and waiver of fees charged on use of digital channels.