The National Bank has secured sh4.2 billion from its major shareholders NSSF and Treasury to boost its capital requirements through subordinated loan. Announcing the facility, the Bank’s Managing Director, Mr. Wilfred Musau said the capital injection is poised to bolster its focus on improving customer transactions, manage operational and market risks, whilst enhancing its drive to grow current customer transactions and acquisitions.
“The solid commitment made by our major shareholders to tackle the recapitalization is an overt approval of the measures taken in the financial year under review to sustain growth. The capital injection will unlock and bolster the key pillars of our growth going forward”, he added.
In a letter addressed to the Financial Services regulator (CBK), Treasury has indicated its commitment to provide a comprehensive and long-term solution on the capital position to bridge compliance, support business growth and meet Internal Capital Adequacy Assessment Process (ICAAP) requirements.
Under ICAAP, all institutions are required to develop an ICAAP document that ensures that total capital levels are adequate and consistent with their strategies, business plans, risk profiles and operating environment on a going concern basis
At the same time, National Bank announced a pre – tax profit of sh785 million for the period ending 31 December 2017. Mr. Musau credited this growth to the bank’s transformation agenda momentum in addressing non-performing loans, cost management, improving operational efficiency and leveraging on technology to deliver solutions to customers.
Loan provisions declined from sh2.4bn to sh0.76bn benefiting from reduction in non-performing loan book and improved credit management ensuring minimal negative migration. The gross Non-performing loans reduced by sh2bn from sh30bn to sh28bn.
During the year, Net Interest income for the period was sh6.7bn, a 14 percent drop from sh7.7bn while the total operating revenues closed at sh9.1bn compared to sh10.6bn in 2016.
Revenues from subsidiaries (NBK Insurance agency limited and National trustee Investment services limited) grew 45 per cent year on year from sh74 million to sh108 million.
Customer deposits grew from sh93.8bn to sh94.2bn in what the bank alludes to customer confidence in the Bank and new products such as diaspora banking, enhanced nat-mobile and improved client service.
In the financial year 2018, National Bank will mark its 50th year since inception having been formed in 1968 with the objective of offering access to financial services to all Kenyans.