Bank owned by Kenya’s richest families posts nearly $65 million in half-year profit

NCBA Group, a leading financial services conglomerate controlled by some of Kenya’s wealthiest families, has achieved remarkable financial performance in the first half of its fiscal year 2023, with profits soaring to nearly $65 million.

According to figures contained in the group’s financial statement, its profit for the first half of 2023 increased by 20.3 percent, leaping from Ksh7.77 billion ($53.6 million) in H1 2022 to Ksh9.35 billion ($64.5 million), showcasing robust performance across all operational segments.

The group’s aggregate income from interest-bearing assets, encompassing government securities, loans, and advances, registered a notable rise from Ksh14.71 billion ($101.45 million) to Ksh24.93 billion ($171.9 million). While non-interest income sourced from fees, commissions on loans and advances, foreign exchange, and dividends climbed from Ksh13.81 billion ($95.23 million) to Ksh14.18 billion ($97.8 million).

The surge in its interest income, from Ksh14.71 billion ($101.44 million) to Ksh24.93 billion ($171.92 million), can be attributed to the bump in net loans and advances extended to customers. These figures increased from Ksh278.9 billion ($1.92 billion) at the start of the year to Ksh292.4 billion ($2.02 billion) by June 30.

This financial performance can be linked to the bank’s decision to heighten interest rates on its loans in response to the recent adjustment of the benchmark rate by the Central Bank of Kenya (CBK), moving from 9.5 percent to 10.5 percent.

As a non-operational holding company, NCBA Group boasts an extensive network of subsidiaries across several African nations, including Tanzania, Rwanda, Uganda, and Côte d’Ivoire.

The financial conglomerate, which emerged in 2019 following the merger of NIC Bank Group and Commercial Bank of Africa Group, is partially owned by some of Kenya’s most prosperous families, including the Kenyatta, Merali, and Ndegwa families.

With a presence in five countries through 109 branches, NCBA Group’s solid financial performance in H1 2023, propelled its retained earnings and total assets to Ksh60.6 billion ($417.93 million) and Ksh660.3 billion ($4.55 billion), respectively.

This impressive performance, which solidified its position as one of Kenya’s most profitable lenders, prompted its board of directors to approve an interim dividend of Ksh1.75 ($0.012) per share. This dividend will be disbursed to shareholders’ bank accounts on September 14.