NAIROBI, Kenya, Mar 9 – Bad loans impaired NIC Bank’s profit by 3.5 percent as the firm recorded Sh4.3 billion net profit for 2016.
The banks Loan loss provisions went up by 120 percent to hit Sh3.7 billion to support the non-performing loans of a few large corporate customers that were impaired in 2015.
The overall NPL ratio, however, declined year on year from 11.2 percent to 10.8 percent.
Total assets went up by Sh3.7 billion, while customer deposits remained flat.
Loan portfolio went up by 8.5 percent to Sh15 billion from Sh13 billion same period in 2015.
“2016 was a challenging year with various factors impacting our operating environment but our strategic shift to reach more retail and SME businesses, as well as branch expansion, continued to drive our performance,” said NIC Bank’s Group Managing Director, John Gachora.
In June 2016, the Kenya Deposit Insurance Corporation (KDIC) appointed NIC Bank to act as the Assets and Liabilities Consultant for Imperial Bank Limited (in Receivership).
The mandate included, amongst others, an assessment of the quality of Imperial Bank assets and liabilities, disbursement of funds to depositors and other advisory services to KDIC.
So far the bank has disbursed more than Sh10 billion to Imperial Bank depositors.
“The Bank is consolidating its business and relooking at our strategy on the back of the interest rate capping law. The Bank remains a strong institution and has fully complied with the new law, We are re-evaluating our business in this new operating environment and we will be rolling out new products and services to ensure we continue being competitive by investing more in our digital platforms,” Gachora added.
Gachora noted the full effects of the new law would start being felt in the first quarter of 2017 results.
The bank declared a first and final dividend of Sh1.25 per share.