NCBA Group posted a 14.4 per cent increase in net profit in the third quarter of the fiscal year ending September, supported by the impressive improvement of its subsidiaries outside Kenya.

The performance left NCBA with a net profit of Sh14.6 billion in the period under review, a year-on-year increase, compared to Sh12.8 billion it recorded in the third quarter of 2022.

Regional subsidiaries of Tanzania, Rwanda, and Uganda collectively delivered a profit before tax of Sh2.3 billion, a notable improvement from the combined loss of Sh312 million posted in the third quarter of 2022.

Accelerated growth

These regional outcomes were a result of the group’s turnaround strategy in Tanzania and accelerated growth in Uganda and Rwanda. “Our Q3 performance continued to be buoyed by the significant contributions of the regional subsidiaries,” says John Gachora, NCBA Group Managing Director.

The lender’s growth trajectory was majorly driven by an uptick in customer deposits and a significant decline in loan impairment charges by 27 percent. Deposits reached Sh548 billion in the review period. NCBAs branch expansion activities resulted in additional locations in Muranga, Kenol, Chwele, Migori, Kahawa Sukari, Eastleigh, Wote, and Ruaka, bringing the Groups branch network to 107.

“These robust financial results are attributable to laser focus on our key strategic priorities to support our customers and grow shareholder returns,” said Gachora.

Assets grew 14 per cent to Sh679 billion while operating expenses closed at 19 per cent up year on year on the back of inflationary pressures and continued investment in the current five-year strategy. As the quarter closed, NCBA Group received the board’s approval to start a discussion for the full acquisition of American Insurance Group (AIG) Kenya Insurance Company Limited.

This will see NCBA join the growing list of banks intensifying their presence through the health and insurance sectors in revenue diversification. NCBA is licensed as a bancassurance intermediary, while its competitors like Equity and Absa Kenya have established in-house insurance units.

The lender says insurance services have become a basic financial need for its customers, hence the decision to acquire AIG Kenya to grow its portfolio of products.

“We believe that by bringing together NCBA’s physical and digital distribution platforms and AIG Kenya’s insurance capabilities, we will accelerate towards our ambition to become a universal bank that addresses a full set of our customers’ financial needs,” noted Gachora.