NCBA Group PLC has recorded a profit after tax of Ksh3.41 billion for the quarter ending March 31, 2022, an increase of 20 percent compared to the Ksh2.84 billion posted during a similar period in 2021.
Most of the profits have been realized through digital loans, which entail Fuliza, an overdraft facility offered through Safaricom’s M-Pesa and M-shwari, a digital loan facility also offered through M-Pesa.
NCBA Group disbursed Ksh163.4 billion in digital loans, 26 percent increase year on year in line with its digitization agenda and its commitment to supporting small businesses and individual customers during this period.
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Assets grew to Ksh587.4 billion, eight percent up year on year while customer deposits closed at Ksh 465.5 billion, seven percent up year on year.
Operating income increased to Ksh13.2 billion, 11 percent up year on year even as provision for credit losses for the quarter was Ksh2.5Bn, four percent down year on year.
Non-Performing Loans (NPL’s) coverage ratio improved to 72.6 percent, from 65.0 percent in the same period last year.
Profit before tax was recorded at Ksh4.85 billion, 25 percent up year on year, which saw profit after tax close at Ksh3.41 billion, a 20 percent up year on year.
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Commenting on the results, John Gachora, Group Managing Director, NCBA Group said the results reflect strong underlying performance across all areas of the business and an improving economy.
“Our financial results this quarter, are a strong reflection that the post-merger foundation that we have built is very solid and is unlocking growth opportunities while delivering operational efficiencies,” said Mr Gachora.
In Q1 2022, total assets increased to Ksh587 billion, representing a growth of eight percent year on year. Customer deposits in the period also increased by seven percent year on year fuelled by strong business development efforts that have attracted new customers to the Group.
Net interest income recorded an eight percent increase year on year due to growth in interest income from treasury investments. The overall effect was an operating income in the period that closed at Ksh13.2 billion representing 11 percent growth against prior year performance.
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The Group gross loans stood at KKsh285.2 billion, representing two percent year on year growth in all banking subsidiaries. Digital loan disbursements however, increased significantly by 26 percent to Ksh163.4 billion from Ksh129.9 billion during the same period a year ago.
NCBA Group’s non-performing loan ratio stands at 15.8 percent, largely in line with industry-wide levels. In Q1 2022, NCBA Group further improved the NPL coverage ratio to 72.6 percent from 65.0 percent in the same period last year. Additionally, NCBA Group’s focus on maintaining high credit quality as well as the concerted recovery efforts, particularly in the digital lending business have begun to bear fruit in stabilizing the credit portfolio.
NCBA Group’s capital and liquidity levels remain very strong, with liquidity at 63 percent and Total capital / Total risk-weighted assets at 17.9 percent.
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