NCBA Group reported a post-tax profit of Ksh 9.8 billion for the first half of 2024, a 5.0 percent growth compared to the first six months of 2023. This performance was achieved despite a tough economic environment, characterized by nationwide floods, a weakening shilling, and protests led by the Gen Z.
“We are pleased to announce another set of strong financial results for the first half of 2024. Our diversified business model has shown resilience against a tight interest rate environment and elevated cost of funds,” said John Gachora, the Group’s Managing Director.
“The economic outlook for the latter half of the year presents a nuanced blend of optimism and caution. In Kenya, we have observed positive trends with inflation easing to 4.6 percent and the local currency stabilizing against major currencies,” John Gachora stated.
The bank saw a 5.9 percent rise in customer loans, which amounted to Ksh 309.7 billion, while customer deposits grew by 2.4 percent, reaching Ksh 528.9 billion.
For H1 2024, NCBA’s revenue totaled Ksh 31.4 billion, showing a slight increase of 1.1 percent year-over-year. The growth was driven by a 25.5 percent surge in interest income to Ksh 38.1 billion, attributed to higher interest rates. However, interest expenses also climbed by 65.4 percent to Ksh 21.6 billion, which impacted the net interest income.
“These outcomes are flat year on year, largely driven by a tight interest rate environment, which has elevated our cost of funds and pressured our profit margins. Despite these challenges, we remain committed to strategically managing our balance sheet and optimizing our financial performance to sustain our growth trajectory,” John Gachora, Group Managing Director of NCBA, said.
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Despite the pressures from rising interest expenses, the bank’s non-interest income saw a 7.3 percent increase to Ksh 14.9 billion, contributing positively to the revenue. Additionally, NCBA’s total assets grew by 4.4 percent, reaching Ksh 689.1 billion.
The bank’s cost-to-income ratio increased to 52.6 percent, up from 46 percent the previous year, indicating higher operational costs. On a positive note, non-performing loans (NPLs) decreased by 4.1 percent to Ksh 40.9 billion.
In a notable move, NCBA Group rewarded its shareholders with an interim dividend of Ksh 2.25 per share, compared to Ksh 1.75 last year. This Ksh 2.25 dividend, the highest in the company’s history, is set to be paid on or after September 25, 2024, to shareholders listed on the register by September 11, 2024. Additionally, the share price experienced a 6.2 percent rise, reaching Ksh 41.10 during this period.
“We are encouraged by the Government’s commitment to support sustainable growth, to maintain fiscal discipline, and to continue fostering a favorable financial environment. These efforts will be key in driving economic progress and supporting the ongoing success of the private sector,” the Group CEO remarked while speaking about the future of the business.