NIC Bank Group has posted a strong third quarter performance to hit a Profit before Tax of KES 5.1bn, growing by 8.5% year on year. NIC Bank, the Group’s flagship banking business in Kenya, reported a Profit before Tax of KES 5.0bn over the same period, growing by 13 %. The Bank continues with its strategic thrust to shift its historic focus from Corporate Banking to the faster growing Retail and SME segments. In Q3 the Bank increased its number of Retail Banking customers by over 18% as compared to the previous year.
Group operating income for the 9 month period grew by 19% to KES 10.1bn compared to KES 8.5bn for the same period last year. The growth was largely attributed to a number of initiatives which the Group has implemented over the last few months to bolster their non-funded income lines. One of the Bank’s key strategies is to grow their fee income by selling across their customer base as well as investing in digital channels. In addition, the Bank has increased the number of active users on NIC NOW and its award winning Internet Banking Platform by 29% and 41% respectively.
Transactions through digital channels now account for almost a quarter of all its transactions.
Customer deposits increased by 7.4%, to KES 105.8bn, compared to KES 98.5bn the prior year, as a result of an increased branch network as well as the roll out of new banking propositions targeting the Retail and SME customer segments. The Group opened two new branches this year, Machakos and Lunga Lunga.
The Bank, which recently emerged as the overall winner at this year’s Institute of Certified Public Secretaries of Kenya (ICPSK), Champions of Governance (COG) Awards, will next month open an additional branch in Nairobi’s Kilimani area and is scheduled to increase its footprint in Kajiado (Kitengela) and Kisii.
“The Group has performed well over the last quarter and we are seeing good momentum in the business, especially in our Retail and SME segments. We will continue with our branch expansion plans to ensure that we offer world-class service and innovative new products to our growing customer base,” said Mr. John Gachora, the Group Managing Director.
Net loans and advances grew by 14.9% over the period under review. This was as a result of concerted efforts by the Group to grow its loan book in the Retail and Corporate segments, whilst keenly managing risks and margins over the period. The Bank recorded strong growth in the Credit Card, Mortgages and Asset Finance businesses.
Operating expenses excluding loan loss provisions have grown by 20% reflecting the Group’s continued investment in talent, technology and new branches. The Bank managed to maintain its Cost to Income ratio excluding loan loss provisions at below 40%, one of the lowest in the industry.
The bank is focused to grow and develop its subsidiary companies in order to offer a wide range of financial services to customers across the region.
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 period under review. In Uganda, the Group will be rolling out Visa enabled debit and credit cards. This will enable NC Uganda customers to use their cards at any point of sale across the country, region and internationally – everywhere Visa is accepted. In Tanzania, the focus remains on Corporate and SME Segments.
Early in the year, the Group launched a new leasing subsidiary, NIC Leasing LLP, the first for a Kenyan bank. This fits into the banks long term strategic plan which is anchored on an aggressive growth strategy especially in Asset Finance, in which it is currently the market leader.
“For the rest of 2015, we will continue to manage our funding costs in light of the current operating environment. We will also seek to minimize our impairment costs through proactive risk management,” said Mr. Gachora. He further added that the bank will continue leveraging technology to enhance customer experience and work with Strategic Partners to aggressively grow both its product and customer base.