NIC Bank Group has posted a Net Profit of Sh2.3 billion for the period ending June 30, 2016, representing a growth of 3% year on year.
The group recorded a strong operating profit which was up 41% year over year.
Total operating income grew by 26% to Sh8.2 billion compared to Sh6.5 billion the same period last year.
NIC Bank’s Group Managing Director, John Gachora attributed the Bank’s performance to concerted efforts by management to focus on growing the retail segments, channels and product offering in line with the Bank’s long term strategy.
He said, “The Bank’s strategy to grow its Retail and SME (Small and Medium Enterprises) segments is bearing fruit, with customer accounts growing by 17% and profitability of the Retail division tripling year on year.”
The Bank’s loan book grew by 4% from Sh108 billion to Sh112 billion during the period while the deposit base increased to Sh112 billion, reflecting a 6% growth from Sh105 billion.
During the period, the Bank’s profitability continued to be impacted by provisions for bad debts relating to non-performing loans.
Total operating expenses including provisions for bad debts, stood at Sh5 billion up from Sh3.3 billion, mainly driven by the branch expansion and related staff costs undertaken during the period.
The Group opened 6 branches during the period under review. The Group’s cost to income ratio which improved from 42% to 35% remains one of the lowest in the industry.
The Group’s total capital increased to Sh34 billion from Sh30 billion last year resulting in improved capital adequacy and liquidity ratios.
“This reorganisation is strategic to support the Group’s medium and long term strategy through supporting a structure that facilitates optimal use of capital, more effective use of strategic and risk management, and improved governance of our subsidiaries,” said Mr Gachora.
Mr Gachora added that the board is of the view that the Reorganization of NIC Bank will have minimal impact on shareholders, customers, employees and regulators while presenting the opportunity to secure the Group’s future growth by allowing sufficient investment of the Group’s capital as is needed to establish and grow subsidiaries engaged in providing complementary services to the Group’s core banking business.