National Bank of Kenya (NBK) has recorded a significant loss of Sh2.97 billion after tax for the period ending 30 September 2023, marking a sharp decline compared to the same period last year. This substantial loss represents a concerning trend, as it reflects a 436 percent drop from the bank’s performance in 2022.
Despite the overall loss, NBK experienced a positive growth in its non-refundable income, which increased by 49% year on year to Sh2.5 billion. This growth is primarily attributed to increased revenues from foreign exchange trading, coupled with increased volumes derived from the bank’s digitalization efforts, the launch of new products, and strategic partnerships.
NBK’s management team has attributed the downward trajectory in profits to a combination of factors, including one-off costs associated with legal matters, a staff voluntary early retirement program implemented in the first half of the year, and an increase in loan loss provisions. These expenses have strained the bank’s income and contributed to the overall loss.
Despite the challenging market conditions and geopolitical dynamics that have caused monetary and fiscal pressure, NBK’s Managing Director, George Odhiambo, remains optimistic about the bank’s future prospects. He expressed confidence in the strategies that the bank has put in place to catapult it back to profitability.
“Commitment to our strategic objectives and focus on prudent risk management, digital innovation, and customer-centricity continue to position us for sustained growth,” he stated.
“Our performance in Q3 also underscores the resilience of our business model and the dedication of our team in delivering value to our shareholders and customers,” he added.
On a positive note, NBK’s customer deposits grew to Sh116 billion, representing a 7 percent increase over the same period in 2022. Additionally, its net loans and advances grew by 12 percent year on year to ShNB 78.2 billion.
While the loss incurred in the third quarter is a cause for concern, NBK’s growth in non-refundable income and its positive performance in customer deposits and net loans and advances indicate that the bank has the potential to recover. The bank’s leadership team remains focused on implementing its strategic objectives and maintaining prudent risk management practices to achieve sustainable growth and profitability in the future.