BY ANTONY MUTUNGA
In 2019, NIC bank and CBA group merged together to form NCBA and since then, the merged group has been recording major profits. The group has recently announced that for the year to December 31, 2021, its profits more than doubled to Sh10.22bn as compared to Sh4.57bn in 2020.
The lender attributed the profit growth to strong operational performance, recording Sh2.72bn growth in operating income as well as Sh2.32bn growth in total interest income. Additionally, it also benefitted from the fall in loan loss provisioning by Sh7.72bn from Sh20.44bn in 2020 to Sh12.72bn in 2021.
“While there is still much more to do, it is clear that our merger is paying dividends. The results are a reflection that we are delivering on our strategy despite the headwinds introduced by Covid-19,” said John Gachora, managing director, NCBA group.
During the period under review, the lender’s total assets also surged by 12% year on year from Sh527.95bn in 2020 financial year to Sh591.09bn. This is the second time the company is announcing its full financial year results, having attracted 11% increase in customer deposits to Sh469.89bn from Sh421.50bn in 2020.
As the group enjoyed its profits, the shareholders were not left out as the board resolved to recommend a total dividend of Sh3.00 per share for the year 2021. This will include a final dividend for the year of Sh2.25 per share (if agreed) and the interim dividend of Sh0.75 per share paid on October 12, 2021.
Shareholders will approve the final dividend for the year at the forthcoming Annual General Meeting, scheduled for 5th May 2022.The dividend will be payable to the shareholders registered on the Company’s register at the close of business on April 29, 2022 and will be paid on or after May 5, 2022.
Going forward, NCBA Group looks at deepening its corporate and asset finance as well as digitizing its operations more as it looks to deliver better products to its customers. The Group is also looking at opening more branches while continually consolidating banks near each other.
The company is targeting to open additional 12 to 15 branches this year despite digitisation disruption that has seen most banks move away from the traditional banking systems. This will be in addition to 13 branches opened in 2021 across Mombasa Nyeri, Karatina, Embu, Naivasha, Ngong, Ruiru, Kakamega, Bungoma, Kiambu, and Kericho.
“NCBA has successfully adjusted to a new normal in this Covid-era. Our business is more resilient than ever before and is on a strong path for growth. I am very excited that our branch expansion and digitization plans make us more relevant to a wider base of customers and enable us to serve them better,” said Mr Gachora.
The performance by the NCBA group is being felt throughout the industry, as most banks that have reported their full-year results are reporting tremendous profit growth besides having built surplus capital as costs for loan defaults fall and lenders resume lending. In fact, seven of the nine tier one banks that have already reported their 2021 financial results have almost doubled their net earnings from Sh69.9bn in 2020 to Sh128.1bn.
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