NCBA Bank MD, Mr John Gachora
NCBA Group’s regional subsidiaries under performed even as the group’s overall full-year net profit for the period ended December 31 grew from Sh4.6 billion to Sh10.2 billion.
The bank’s subsidiaries in Tanzania and Uganda recorded significant losses costing the group a total of Sh1.7 billion.
On a positive note, NCBA’s newest subsidiary in Rwanda recorded a Sh54 million profit.
NCBA Bank Rwanda, formerly Commercial Bank of Africa (Rwanda), has a total asset base of Sh444 billion.
Speaking at a media briefing on Thursday, NCBA managing director John Gachora said Tanzania’s Sh940 million loss was mainly due to the significant provisions the bank took from its book after the 2020 merger.
NCBA Uganda’s Sh765 million loss was driven by the under performance of the no-cash business which is similar to Kenya’s Mshwari.
“Uganda was in a lock-down for two years and what we saw even here in Kenya, is our Mshwari customers basically stopped paying because most of them are daily business owners” he said.
Gachora said in Kenya, the group was affected by long 2020 lockdown but recovered when the economy reopened.
The group currently operates in Kenya, Rwanda, Tanzania, Uganda and Ivory Coast.
It plans to increase its Kenya network by 12 more branches to add to its existing 100 branches in six states.
The bank attributed it 124 per cent profit growth to strong performance from its banking, unit trust and investment bank operations.
Non-funded income remained a key revenue driver clocking Sh22.1 billion in the year ended December 2021 up from Sh20.9 billion.
Improved performance in Kenyan subsidiaries was also named as a key driver of the growth with Kenya’s customer deposits increasing by 12 per cent to contribute to the group’s overall Sh469.9 billion.
The Group disbursed Sh584 billion in digital loans which was a 35 percent increase from 2020’s Sh434 billion.
NCBA in 2019 disbursed Sh343 billion to its digital lenders in different platforms including Mshwari and Fuliza which it operates in conjunction with Safaricom.
Fuliza, an overdraft mobile facility recorded the highest amount of money borrowed.
Interest income from government securities grew to Sh20.3 billion from Sh16.8 billion, bringing the bank’s total annual to Sh46.51 billion up from Sh44.2 billion.
Similar to other banks that set high loan-loss provisions in 2020, NCBA slashed its loan-loss provision by almost half from Sh20.4 billion to Sh12.7 billion, due to reduced lending activities.
Other reductions were in staff costs, director emoluments, and rental charges, bringing down operating expenses to Sh33.4 billion from Sh40 billion.