19 November, 2014
Listed lender NIC Bank Group Limited has reported a Ksh 4.7 billion Profit Before Tax, or 19% year over year increase, for the third quarter ending September 30, 2014 on the back of improved lending to key sectors of the economy.
Announcing the results today, the Group Managing Director, Mr John Gachora, attributed the improved performance to robust initiatives by the Group to tap into the growing East African Community regional market, as it strengthens its diverse business portfolio spanning corporate banking, asset and trade finance, investment banking, financial advisory, stock brokerage and Bancassurance.
“We are happy with our results so far and remain optimistic we will continue on this growth trajectory into next year. Our focus will be to penetrate the retail and SME markets as well as increase our footprint in the region,” said Mr Gachora.
“While we anticipate the macro-economic fundamentals to remain fairly stable, the security threats in Kenya remains a real risk to the economy and our growth, we are forever optimistic that government efforts will bear fruit,” said Mr Gachora.
Total operating income grew to Ksh 8.5 billion compared to Ksh 7.8 billion the same period last year, largely driven by increase in interest income and non-funded income.
Growth in our loan book saw interest income grow by 18% to Ksh 10.1 billion, compared to Ksh 8.6 billion the previous year. The loan book grew by 26 %, from Ksh 76.7 billion in Sept 2013 to Ksh 96.8 billion in September 2014.
To fund this growth in advances, the deposit base increased to Ksh 98.5 billion as at September 2014, reflecting a 22% growth from Ksh 80.9 billion in September 2013.
Non funded income also grew by 10% to Ksh 2.7 billion from Ksh 2.4 billion in line with the Group’s strategy to diversify its revenue sources.
The Group’s cost to income ratio remained at the same level as the prior year at 42% and continues to be one of the lowest in the market. Total operating expenses, reduced by 3% to Ksh 3.7 billion.
The growth and development of the subsidiary companies remains a key strategic objective and one that is aimed at broadening both the range of financial services offered to customers and enhancing diversity within NIC Bank Group.
NIC Bank Tanzania, NC Bank Uganda, NIC Capital (Investment Banking), NIC Insurance Agents (Bancassurance) and NIC Securities (Brokerage) all contributed positively to the Group’s financial performance in the first nine months of 2014.
Capital raising and Growth
NIC Bank has an ambitious growth strategy which includes increasing its retail and increasing its footprint in the region. NIC has been on a capital raising exercise which saw it issue a bond in August and a Rights Issue that closed last week.
In September, the bank listed the first tranche under its Ksh 8 billion Medium Term Note programme at the Nairobi Securities Exchange (NSE). The Ksh 3 billion tranche received offers of Ksh6.5 billion. The bond issue was upsized to Ksh 5.5 billion from the original Ksh3 billion.
“The Bond’s success was a vote of confidence on the Bank’s long-term growth strategy. All indications are that we shall have a successful rights issue and believe we shall share positive results in December,” said Mr Gachora.
“The money will go towards strengthening our capital base so as to support growth in our loan book for both the SME and corporate segment. It will also help us roll out our ambitious strategy that will see us open new branches across the region to cater for our retail and SME clients.”
NIC Bank is optimistic about the future and positioning itself to grow its retail and business banking alongside its strong corporate banking business and asset financing. Despite intensified competition, the bank is riding on its innovation strategy to give it an edge in the market.
“We are focused on building our customer base while reducing the cost of funds and introducing new products into the business and the market,” said Mr Gachora.
For further information, please contact: NIC Bank’s Marketing & Communications Manager, Lena Karauri-Sitoyo, firstname.lastname@example.org or +254 20 2888390