NAIROBI, AUGUST 22 ― The National Bank of Kenya has reported a Ksh282.7 million loss for the year to June 30, 2018 as the lender recorded lower interest gains from its shrinking loan book and other investment areas.
NBK’s loss is a nose dive from the Ksh179.8 million profit it posted in a similar period last year, becoming the first lender to report a loss so far as entities continue to release half-year results.
The loss came as the bank’s loan book (loans and advances to customers) reduced by 16.1 per cent to Ksh47.82 billion from Ksh57.02 billion last year.
Customer’s deposits also shrunk to Ksh95.9 billion from Ksh98.8 billion in a similar period last year.
The factors saw the bank record an 8.9 per cent drop in interest income which fell to Ksh4.1 billion from Ksh4.5 billion.
Interest income from loans and advances was down at Ksh2.1 billion compared to Ksh2.4 billion realized last year.
Earnings from government securities also went down with the bank recording a Ksh1.9 billion interest, compared to Ksh2.1 billion it realized in 2017.
That from deposits and placements with banking institutions also dropped to Ksh42.5 million from Ksh51.5 million last year.
During the period, directors’ emoluments increased to Ksh23.8 million from Ksh19.6 million, despite the bank cutting on its total operational expenses by 7.9 per cent to Ksh3.5 billion, from Ksh3.8 billion.
Staff costs expenses also increased slightly to Ksh1.88 billion from Ksh1.87 billion last year.
The Nairobi Securities Exchange listed lender has also reported a rise in Non-Performing Loans in the period, which went up 2.4 per cent to Ksh30.1 billion. This is up from Ksh29.4 billion last year.This came as the bank’s insider loan book grew 8.9 per cent to Ksh4.9 billion from Ksh4.5 billion in a similar period last year, occasioned by higher employee borrowing.The bank’s staff borrowed Ksh4.89 billion in the six months compared to Ksh4.48 billion in a similar period last year.Directors, shareholders and associates however reduced their borrowing to Ksh26.5 million, compared to Ksh28.1million borrowed last year.“In March 2018, the principal shareholders gave formal commitment for a comprehensive capital solution, the Board notes that this process is on-going,” the bank reported in its financial report.