Wednesday, July 23, 2014
NIC Bank Group Limited has reported a Shs 2.9 billion Profit Before Tax or 11% increase for the first half ended June 30, 2014 on the back of improved lending to key sectors of the economy in Kenya and the region.
Announcing the results today, the Group Managing Director, Mr. John Gachora, also attributed the improved performance to robust initiatives by the Group to tap into the growing East African Community regional market, as the Group strengthens its diverse business portfolio spanning commercial banking, asset and trade finance, investment banking, corporate financial advisory, stock brokerage and Bancassurance.
“We are optimistic that we will sustain the growth trajectory into the second half of the year with more focus on deal making opportunities in Kenya and the region. While we anticipate the macro-economic fundamentals to remain fairly stable, the security threat remains a real risk to the economy,” said Mr. Gachora.
Total income for the first half was Shs 5.4 billion compared to Shs 5.0 billion in the first half of last year, driven largely by increase in interest income and non – funded income.
Interest income grew by 19% to Shs 6.7 billion, an increase of Shs 1,086 million, attributable to the growth in the loan book by Shs 20.5 billion [or 29%] from Shs 71 billion to Shs 91.5 billion in June 2014. To fund this growth in advances, the deposit base increased to Shs 93.5 billion as at June 2014, reflecting a 17% growth from Shs 80 billion in June 2013.
The Group’s capital base as at June 2014 stood at Shs 19.2 billion, a growth of Shs 2.3 billion over June 2013, with key banking regulatory requirements in excess of the minimum thresholds set by the Central Bank of Kenya.
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 (3%) to the Group’s financial performance in the first half of 2014.
Growth and expansion
NIC Group has a strong ambition to grow its presence in the region as a key active player contributing to the growth of the regional economy. The company is pursuing sustainable growth in earnings driven primarily by the retail and business, mainly SME segments, and leveraging its diverse business portfolio through cross-selling.
“We have also positioned ourselves as the financial partner of choice for businesses eyeing opportunities in the regional market. Our capability to handle cross border deals through our investment and corporate advisory subsidiary, NIC Capital, firmly positions us to grow our revenue as more companies expand their operations into the region,” said Mr. Gachora.
To finance its domestic and regional expansion strategy, NIC is in the process of raising additional capital through a bond issue in August followed by a Rights Issue in September.
The company will hold an Extra-Ordinary General Meeting on 6th August to seek shareholders’ approval for the Rights Issue. This is the third Rights Issue for the bank following a successful one in October 2012 which was over-subscribed.
“We will continue to focus more on retail and business banking. Although we anticipate intensified competition in that space, innovation will form the bedrock of our strategy,”noted the GMD. He further added that NIC will focus on building its customer base while reducing the cost of funds and introducing new products into the business and the market. ENDS/……
For further information, please contact:
NIC Bank’s Marketing & Communications Manager, Lena Karauri-Sitoyo, firstname.lastname@example.org or +254 20 2888390