NIC Bank Group Managing Director John Gachora has said the bank’s focus on growing the Retail and SME segments of the business is paying off.
This is despite the group’s 2016 quarter one pre-tax profit staying flat at Sh1.4 billion.
The bank was able to grow its Retail customer accounts by 20 per cent, in line with its strategy to grow the Retail and SME (Small and Medium Enterprises) segments.
Total operating income grew by 29 per cent to Sh4.1 billion compared to Sh3.2 billion the same period last year, largely driven by an increase in interest income and non-funded income.
“Our culture of innovation is a key factor in driving the growth of our Retail and SME business. Furthermore, the bank’s results show that we continue to dominate the Asset Finance space,” Mr Gachora said.
Mr Gachora added that the Bank’s profitability was impacted by additional provisions relating to non-performing loans taken in Q4 2015.
“We continue to make progress on the recovery,” he said.
In the period under review, the bank grew its branch network in Kenya to 29 branches, with the opening of its Kisii and Kitengela branches.
“Our branch expansion will continue to ensure we offer our customers with more points of access to the bank. By 2018, our target is to have 50 branches across Kenya,” said the MD.
Growth in the bank’s loan book and investments in government securities saw interest income grow by 33 per cent to Sh5.0 billion, compared to Sh3.8 billion the previous year.
The loan book grew by 6%, from Sh106 billion in March 2015 to Sh112 billion in March 2016. To fund this growth in advances, the deposit base increased to Sh110 billion during the period under review, reflecting a 15% growth from Sh96 billion in March 2015.
The Group’s cost to income ratio declined to 34% from 42% the prior year and continues to be one of the lowest in the market.
Total operating expenses at Sh1.4 billion, grew marginally with branch expansion and related staff costs planned for later in the year.