National Bank of Kenya pretax profits up 46 per cent

Published on 02/08/2008

By John Njiraini

National Bank of Kenya has realised a 46 per cent increase in half year profit before tax to Sh902 million compared to Sh617 million, last year.

NBK Managing Director Reuben Marambii said operating income increased by 16 per cent to Sh2.5 billion from Sh2.1 billion the same period last year.

During the period in review, the bank reduced its provisions for bad loans and doubtful debts from Sh350 million to Sh240 million.

Customer deposits grew to Sh34 billion up from Sh32.6 billion.

"We plan to remain focused in consolidating the gains while taking advantage of emerging opportunities," said Marambii in a press release.

pay dividend

He said the bank was implementing a two-year strategic plan aimed at eliminating the deficit in reserves to enable it pay dividends. For the past 11 years, NBK shareholders have not been paid a dividend due to the deficit, which now stands at Sh2 billion.

The bank also plans to push ahead with an expansion programme to open up branches in all provincial headquarters and other locations besides refurbishing its existing branches.

NBK's recovery has prompted the Cabinet to approve the sale of more Government shares through the Nairobi Stock Exchange.

On Thursday the Cabinet authorised a two-phase restructuring that will see the entry of a strategic investor and off-loading of additional shares to the public.

In the first phase, the National Social Security Fund (NSSF), which controls 48 per cent shareholding, will sell a 25 per cent stake to a strategic investor who will be required to strengthen the bank's management and capital base.

The second phase will see the Government sell 17 per cent of its share and 23 per cent of NSSF shares to public through the stock market.

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