NIC Bank H1 profits up - CNBC Africa

NIC Bank H1 profits up

Earnings

by Trust Matsilele 0

Financial services provider, National Industrial Credit (NIC) Bank has reported an 11 per cent increase in profits.

The NIC Group recorded a 2.9 billion Kenyan shillings profit, an increase of 281 million Kenyan shillings in comparison to the previous period in 2013 as a result of improved lending to key sectors of the economy in Kenya and the region.

According to John Gachora, Managing Director at NIC, the group's impressive performance is also due to vigorous initiatives to expand into the ever growing East African market.

In the beginning of the year, NIC launched a new product dubbed ‘Move to Now Generations’ to enable its customers get all the services via mobile phones and other electronic devices joining the growing list of the banks in Kenya offering their customers an option to open accounts online without necessarily going to the bank or any agent.

“We are optimistic that we will sustain the growth trajectory into the second half of the year with more focus on deal making opportunities in Kenya and the region. While we anticipate the macro-economic fundamentals to remain fairly stable, the security threat remains a real risk to the economy,” said Gachora.

The group’s income interest grew to 6.66 billion Kenyan shillings, an increase of 19.5 per cent. This growth was spurred by loans and advances which grew by 854 million Kenyan shillings in comparison to the first half last year. Also government securities boosted the interest income as it recorded 1.14 billion Kenyan shillings compared to 915 million Kenyan shillings in 2013.

The group is seeking to strengthen its business portfolio across commercial banking, asset and trade finance, investment banking, corporate financial advisory, stock brokerage and Bancassurance.

“We will continue to focus more on retail and business banking. Although we anticipate intensified competition in that space, innovation will form the bedrock of our strategy,” noted Gachora.

As at June 2014 stood, the group’s capital base stood at 19.2 billion Kenyan shillings, in excess of the minimum thresholds set by the Central Bank of Kenya.

The lender is seeking to raise funds through a bond issue to boost expansion strategies as well as meet statutory capital requirements. The amount to be raised, the ratio of rights, price offer and date of issue will be set by directors once it is given the green light by the Capital Markets Authority (CMA).

Yesterday, the lender traded at 59.50 Kenya shillings unchanged from the previous session in the stock market. NIC’s year-to-date performance stands at -0.83 per cent.

The group’s subsidiaries in Tanzania and Uganda, as well as NIC Capital (investment banking), NIC Insurance Agents and NIC Securities (Brokerage) contributed 3 per cent to the Group’s half year performance. 

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