National Bank of Kenya (NBK) has today announced a profit before tax (PBT) of Ksh.3.22 billion in the nine months ending September 2015, in what will pass as one of the best annual performances by the bank in its 48 years history.
This performance is a 79.5 percent increase in PBT, compared to similar periods in 2014 when Ksh 1.8 billion was reported. As one of fastest growing lenders in Kenya, National Bank has been undergoing massive restructuring with the aim to transform into a top five tier-1 lender in Kenya.
NBK performance has improved each year since Managing Director & CEO Munir Sheikh Ahmed commenced the transformation works at the bank. In 2013 it reported Ksh 1.8B trading profits which rose to Ksh 2.43B in 2014 and now has jumped to Ksh3.22B for Q3 2015.
Mr. Munir said the remarkable achievements show the effort and dedication put in by the Bank’s Board, management and staff. “Our performance over the years since 2013 is a result of structures that have been put in place to ensure that business runs efficiently and meets the international banking standards to deliver excellent results. We expect this to go on as we implement the remaining projects in the transformation plan.”
The Bank’s transformation has seen the bank diversify its revenue streams, roll out multiple delivery channels such as NatMobile (mobile banking), NatConnect (internet banking) and the National Bank Agency and launch new products for its customer segments which has boosted both loyalty and growth of the customer base. NBK has increased service distribution by 25 new branches to give it a total of 80 in Kenya.
In the nine month period, total operating income rose by 21 percent to Ksh 8.8 billion. The bank also excelled in cost reduction, cutting an impressive four percent on operating expenses for the nine months from five billion from 5.2bn in a similar period in 2014 even as it invested heavily in new branches countrywide.
On the back of deepening relationships with customers, NBK loans advances went up 28 percent to Ksh 73.6 billion, from Ksh 57.6 billion in the same period in 2014 with customer deposits at Ksh 90.8 billion. This was driven by newly introduced customer focused structure which has seen new strategic business units established alongside customer segments which has enhanced services. The Institute of Customer Service (ICS) Kenya Chapter is among institutions that have recognised the bank for its improvements in customer satisfaction, after NBK customers voted the bank the ‘Best Bank in Customer Service’ in 2015.
The Managing Director said: “It is remarkable that our costs are reducing year-on-year, even as the bank becomes more profitable year-on-year, the business volumes rise, branch network expand fast and investment in technology and new product lines all go up. This, we have achieved through centralisation, automation and headcount reduction undertaken in the last two years and nine months.
“This performance is a direct result of our transformation plan under which we are driving a total of 50 projects hoped at giving National Bank a tier 1 status.”
National bank’s remaining project’s will see it increase profitability and growth this year, on the back of growing goodwill from its customers, and Kenyans powered by the new brand and the bank’s transformation programme.
Pictured: House Majority Leader, Adan Duale and Senate Speaker, Ekwe Ethuro join National Bank Managing Director, Munir Sheikh Ahmed during the launch of Premium Banking