NCBA Group has posted a Sh2.52 billion net profit in the nine months to September 2020 and warned of an expected heavy dip in profits for the full year owing to Covid-19 pandemic which have slowed down the economy.
This is the first full nine months of trading since NIC Group merged with Commercial Bank of Africa Limited (CBA) to form NCBA.
While it is difficult to compare with last year’s results as the two banks were operating as different entities, CBA alone had posted a net profit of Sh4.61 billion in nine months to September 2019 meaning that the current net profit of NCBA is 45.3 percent lower.
“The earnings for the current financial year are expected to be substantially lower than the earnings reported for the same period in 2019,” the bank said in a statemement.
Duing the period under review, NCBA net interest income was at Sh16.96 billion as net loans and advances to customers closed at Sh249.69 billion.
The lender disbursed Sh310 billion as digital loans to small enterprises and individuals and at the same time booked Sh661.88 million as exceptional costs. This was related to merger costs such as integration, advisory and legal services.
Loan loss provisions during the period were at Sh13.35 billion or 47 percent of the Sh28.62 billion total operating expenses, reflecting the rise in customers defaulting on taken loans.
“The trends show that the rate of impairments is increasing, due to delayed repayments and an assessment of additional stress that could emerge due to Covid-19,” said the lender.
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