Joseph Bonyo
3 August 2009
Nairobi — National Bank has reported an 11 per cent increase in its half-year pre-tax profits. The bank made Sh1 billion in the period ended June 30, 2009 compared to Sh902 million over the same period of the previous year.
According to managing director Reuben Marambii, this was attributed to a steady increase in interest income. "The results are a marked improvement for us at the bank considering that we are in a very depressed economy," Mr Marambii told the media on Monday.
The rise in the bank's interest income was stimulated by a 43 per cent growth in loans and advances which saw it issue Sh10.6 billion compared to Sh7.4 billion at the same time last year. Consequently, interest income grew 10 per cent to Sh2.1 billion, up from Sh1.9 billion last year.
On the other hand, non-interest income for the bank also grew 13 per cent due to an increase in transactional income. The lender's operating expenses increased in the period to Sh1.8 billion, form Sh1.6 billion.
This, Mr Marambii noted, was as a result of inflation and cautionary branch expansion. The bank opened two new branches in the period and also extended its opening hours.
Despite the performance, the bank directors did not recommend the payment of dividends. However, with the accumulated losses going down 33.4 per cent, this trend might be reversed.
"It is our focus that by the end of this year we will have brought the level of losses to zero. If this is achieved then we shall start paying dividends based on our next year's results," said the managing director.
Partially owned by the government of Kenya, the bank is lined up for privatisation anytime soon. However Mr Marambii noted that this might not be within the year as largely expected.
"While things are already in motion, I do not expect the privatisation to be soon. This could take place even one year from today," he said.