Kenyan Listed Banking Sector Quarterly Earnings and Operating Metrics
NCBA Bank Summary of Performance - Q3'2022
.
•
.
Profit before tax increased by 64.5% to Kshs 18.2 bn, from Kshs 11.1 bn in Q3'2021, with the effective tax rate declining to 29.6%, from 41.0% in
Q3'2021. Similarly, Profit after tax increased by 96.2% to Kshs 7.8 bn from Kshs 4.0 bn in Q3'2021
Total operating income increased by 26.2% to Kshs 45.8 bn, from Kshs 36.3 bn in Q3'2021, driven by a 15.1% increase in Net Interest Income (NII) to Kshs
23.2 bn, from Kshs 20.2 bn in Q3'2021, coupled with a 40.1% increase in Non-Funded Income (NFI) to Kshs 22.5 bn, from Kshs 16.1 bn in Q3'2021,
Total operating expenses increased by 8.9% to Kshs 26.9 bn, from Kshs 24.7 bn in Q3'2021, largely driven by a 19.9% increase in staff costs to Kshs 7.1
bn, from Kshs 5.9 bn in Q3'2021. The increase in staff costs was mitigated by a 9.2% decline in Loan Loss Provisions (LLP), to Kshs 8.3 bn, from Kshs 9.2
bn in Q3'2021
•
The balance sheet recorded an expansion as total assets grew by 5.8% to Kshs 595.4 bn, from Kshs 562.6 bn in Q3'2021
.
The group's asset quality improved, with the gross non performing ratio declining to 12.6% from 17.0% recoded in Q3'2021, with gross non-performing
loans declining by 20.9% to Kshs 36.4 bn from Kshs 46.0 bn recorded in Q3'2021
•
Going forward, we expect the bank's growth to be driven by:
•
Leveraging on digitization: The group has continued to embrace digital lending and currently controls the largest share in digital lending market in
Kenya. The bank boost of the popular mobile lending and credit products Mshwari and Fuliza and it recently announced plans to expand into eight
African markets using the mobile and digital banking platforms. Currently, the group is already awaiting license to start lending in Ghana at the
beginning of Q1'2023. Having recorded strong performance in Q3'2022, we expect that the move will have be a key driver to its interest income
Cytonn
54View entire presentation