NCBA Records Ksh 9.8bn Profits in H1 2024

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NCBA Group posted a profit after tax of Ksh 9.8 billion in H1 2024, a modest increase of 5.0% compared to the same period last year. This was despite a challenging economic environment affected by countrywide floods, a depreciating shilling, and Gen Z protests.

“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% and the local currency stabilizing against major currencies,” John Gachora stated.

Customer loans increased by 5.9% to Ksh 309.7 billion, while customer deposits rose by 2.4% to Ksh 528.9 billion.

NCBA’s revenue for the first half of 2024 reached Ksh 31.4 billion, a slight uptick of 1.1% compared to the previous year. Interest income grew by 25.5% to Ksh 38.1 billion, driven by higher interest rates. However, interest expense also increased by 65.4% to Ksh 21.6 billion, impacting 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.

Despite the rising interest expense, NCBA’s non-interest income grew by 7.3% to Ksh 14.9 billion, contributing to the overall revenue growth. Additionally, the bank’s total assets expanded by 4.4% to Ksh 689.1 billion.

The bank’s cost-to-income ratio rose to 52.6% from 46% in the previous year, reflecting increased operational costs. NCBA’s non-performing loans (NPLs) declined by 4.1% to Ksh 40.9 billion.

Read: KCB Bank Profits Rise by 86 percent for H1 2024

Notably, NCBA Group’s shareholders were rewarded with an interim dividend per share of Ksh 2.25, compared to Ksh 1.75 in the previous year.

The Ksh 2.25 interim dividend, the highest in the company’s history, will be payable on or shortly after September 25, 2024, to shareholders recorded in the register by September 11, 2024. The share price also increased by 6.2% to Ksh 41.10 during the 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.