Regional units drive NCBA’s net profit up to Sh14.6 billion
Regional lender NCBA Group has reported a profit after tax of Kes14.6 billion in its third-quarter results ending on September 30th, 2023. This positive outcome is attributed to the strong performance of its subsidiaries in Tanzania, Uganda, and Rwanda.
The nine-month profit reflects a 14.4 percent increase compared to Kes12.8 billion reported during a similar period last year. John Gachora, the Group Managing Director and CEO, stated, “Our Q3 performance continued to be buoyed by the significant contributions of the regional subsidiaries (Tanzania, Rwanda, and Uganda), which collectively delivered a profit before tax of Kes2.3 billion (a notable improvement from the loss of Kes312 million posted in Q3 2022).”
These regional outcomes are a result of the Group’s turnaround strategy in Tanzania and accelerated growth in Uganda and Rwanda, according to Mr. Gachora.
During this period, customer deposits closed 19 percent higher year on year at Kes548 billion, while assets grew to Kes679 billion, a 14 percent increase. NCBA continued to embrace digital transformation for its over 60 million customers across Africa, with digital lending increasing by 33 percent to Kes695 billion for the period. This achievement was realized through enhanced online and mobile platforms and streamlined digital processes, the bank reported.
However, the Group trimmed provisions for bad loans by 27 percent to Kes6.1 billion. Additionally, the Group’s operating income edged up by 2 percent to Kes46.7 billion year on year. The Group’s operating expenses closed at a 19 percent increase year on year, driven by inflationary pressures and continued investment in the current five-year strategy.
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NCBA branch expansion
In Kenya, NCBA has continued its branch expansion and now has a presence in Muranga, Kenol, Chwele, Migori, Kahawa Sukari, Eastleigh, Wote, and Ruaka, bringing the Group’s branch network to 107. NCBA maintained its position as a market leader in asset finance with a 34 percent market share driven by an improved focus on corporate customers, innovative solutions, and stronger dealer partnerships.
In the quarter, NCBA launched its Sustainability platform, “Change the Story,” and unveiled a set of 15 Sustainability Commitments as the Group strives to catalyze action towards a greener and more sustainable future.
As the quarter closed, NCBA announced its intention to wholly acquire AIG Kenya Insurance Company Limited. Mr Gachora commented on future prospects, stating, “Overall, we remain optimistic about full-year performance prospects. The risks to this outlook, of course, are many but largely stem from an even more uncertain external environment, notably the expectation that interest rates will remain ‘higher for longer’ to bring down inflation to within target.
“Even then, given the concerns around Kenya’s debt sustainability, the recently announced IMF staff-level agreement on the sixth review of the extended credit facility that will see the country receive an immediate release of US$638 million should undoubtedly provide further impetus to output.”
