Pretax profit up 122pc, says lender

 

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By Veneranda Sumila,The Citizen Reporter

In Summary

• The profit before tax for the National Bank of Commerce (NBC) rose by 122 per cent during the year ending June 2014, the financial entity’s results show.

Dar es Salaam. The profit before tax for the National Bank of Commerce (NBC) rose by 122 per cent during the year ending June 2014, the financial entity’s results show.

The bank registered a profit before tax of Sh13.081 billion during the year to June 2014, up from Sh5.883 billion during the preceding year as the bank reaps the benefits of recapitalisation and improvements in impairment losses.

“On a year-on-year basis, Profit Before Tax increased 122 per cent from Sh5.883 billion to Sh13.081 billion on the back of favourable variances on income from investment of the recapitalised funds as well as reduction in impairments due to an improvement in the asset book,” the bank said in a statement issued yesterday – four days after the release of its financial results for the second quarter of 2014.

A loan impairment is a credit risk provision which is established if there is objective evidence that a company, a bank or a group of companies will be unable to collect all amounts due on a claim according to the original contractual terms.

During the first six months of this year, NBC’s impairment on loans and advances were 152 per cent lower than during the first half of 2013. On quarter-on-quarter basis, NBC’s total assets increased by five per cent to Sh1.7 trillion during the quarter ending June 2014 from Sh1.6 trillion during the first quarter of the current year.

This, according to the statement, was mainly driven by the growth in customer liabilities, which improved by eight per cent year-on-year from Sh1.5 trillion in the first half of 2013 to Sh1.7 trillion as at 30th June 2014.