An NIC Bank brach on Kenyatta Avenue in Nairobi. FILE PHOTO | NMG
NIC Group’s net profit for 2017 dropped by
4.4 per cent to Sh4.14 billion following a drop in interest income that
the lender blames on the rate cap and a slow economy.
Although
the bank grew its loan book by Sh5.3 billion to Sh 119.8 billion, the
interest income from this line of lending dropped by 13.2 per cent to
Sh13.15 billion. Gross non-performing loans rose by Sh730 million to hit
Sh14.3 billion.
Interest income from government
securities on the other hand was up by 39.3 per cent to Sh5.21 billion,
after the lender increased its stock of securities by Sh24.2 billion to
Sh51.5 billion.
“The yield on loans and advances are
declining as more and more customers have challenges in meeting their
credit obligations. However this was offset by government securities
where due to increased investment we have seen higher income,” said NIC
Bank finance and strategy director David Abwoga on Thursday.
The bank is now set to pay shareholders a lower dividend of Sh1
per share for the 2017 financial year, down from the Sh1.25 they were
paid last year.
Shareholders will however enjoy a bonus
share issue this year after NIC proposed a one for 10 issue, which
translates to an additional 64 million shares going into issue.
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