NCBA Group delivered a resilient set of FY’2025 results, driven by steady earnings growth and a notable shift in its income mix toward interest-driven revenues. Profit After Tax rose by 7.0% to Kshs 23.4 bn, supported primarily by a strong 17.0% increase in total operating income to Kshs 73.3 bn. However, this growth was partially offset by a faster 21.0% rise in operating expenses, highlighting emerging cost pressures that continue to shape the bank’s profitability trajectory.
A key highlight from the results was the robust performance in Net Interest Income (NII), which surged by 27.7% to Kshs 44.1 bn. This reflects the bank’s ability to capitalize on the interest rate environment, despite the general compression in rates, as evidenced by the expansion in Net Interest Margin to 7.1% from 5.7% in FY’2024. Consequently, NII contribution to total operating income increased to 60.1% from 55.0% in FY’2024 signalling a deliberate pivot toward core lending activities. On the other hand, Non-Funded Income (NFI) grew modestly by 3.8%, with its share of total income declining to 39.9%, indicating relatively subdued performance in fees and transaction-based revenues.
Despite the strong top-line growth, cost dynamics remain a concern. Total operating expenses rose sharply by 21.0% to Kshs 45.5 bn, largely driven by a 46.3% increase in loan loss provisions to Kshs 8.0 bn. This suggests that while asset quality has marginally improved, evidenced by a decline in the gross non-performing loan ratio to 10.4% from 11.5%, the bank is still maintaining a cautious stance through higher provisioning. Additionally, staff costs increased by 21.9% to Kshs 16.3 bn, from Kshs 13.4 bn in FY’2024.
On the balance sheet side, NCBA recorded moderate expansion, with total assets growing by 7.5% to Kshs 716.0 bn. This was largely supported by a 5.0% increase in net loans and advances to Kshs 317.2 bn, indicating continued credit growth, albeit at a measured pace. Customer deposits also rose by 5.9% to Kshs 531.9 bn, reflecting stable funding and sustained customer confidence.
Profit Before Tax grew by a stronger 10.9% to Kshs 27.9 bn, reinforcing the bank’s underlying earnings strength. Shareholders also benefited from an enhanced dividend payout, with a total dividend of Kshs 7.10 per share, translating to a yield of 8.0% and a payout ratio of 50.0%. Overall, NCBA’s FY’2025 performance reflects a bank benefiting from improved margins and solid earnings growth.
