Kaburu Mugambi
6 November 2009
Nairobi — National Bank of Kenya's pre-tax profit rose six per cent in the first nine months of the year from Sh1.3 billion to Sh1.4 billion.
Although investment in government securities with Sh2 billion income was the highest earner, proceeds from loans and advances registered significant growth during the period.
During the third quarter, the bank's loans and advances to customers increased from Sh8 billion to Sh12 billion. Consequently, the company made Sh1.1 billion, up from Sh785.2 million, from the loans and advances.
Customer deposits rose 27 per cent from Sh32.6 billion to Sh41.4 billion. Managing director Reuben Marambii yesterday said the bank's customer base growth reflects customer satisfaction.
"The bank has been observing market trends keenly, and despite the market pressure, our current interest rates on loans and advances have remained unchanged, while giving a good yield on deposits," he said.
If the bank maintains this profitability, there is a possibility shareholders could start getting dividend again as early as next year.
No dividend
For almost 10 years, the bank has made no dividend payment in line with regulations that require a company to clear previous losses before rewarding its shareholders.
Though it returned to profitability seven years ago, the losses it suffered from 1997 led to accumulated losses amounting to Sh4.2 billion. These losses have to be cleared before the company can legally pay dividend.
But the bank has been ploughing back some of its profit to cover the losses and it has managed to slash them to Sh401.1 million at the end of September 2009.
Be the first to Write a Comment!
Copyright © 2009 The Nation. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
