National Bank of Kenya (NBK) profits are set to slump by over 25 percent for the financial year ended December 2018.
The bank has attributed the drop to higher loan impairment charges and restructuring costs.
“(This is) primarily due to increased loan impairment charges beyond initial projections due to a revision of valuations and values recoverable from the non performing loan portfolio,” read a cautionary statement from the Nairobi Securities Exchange listed lender.
The lender has been on a downward movement, even as it struggles with loan debts amounting to more than Ksh47.1 billion, part of which it might be forced to write off for non-recovery. Ksh4.2 billion bailout money from principal owners has also delayed.
70 per cent of the debts (Ksh32.9 billion) are Non-Performing Loans (NPL’s), which could see the bank collapse.
“During the year the group incurred a one off restructuring cost (voluntary early retirement programme) as part of wider business alignment, the full benefit will be realized in 2019,” the statement added.
Read: How Unscrupulous NBK Managers Are Stealing From Customers Before It Collapses
Following the losses, the Treasury has approved for sale of NBK alongside Consolidated Bank (CBKL) and the Development Bank of Kenya (DBK). In case this fails, the government is mulling merging the three lenders in a resuscitation move.
The banks core capital stood at Ksh2.34 billion as of September 2018, as compared to Ksh9 billion in September 2017.
The NSSF owns 48.1 percent of the NBK while Treasury holds 22.5 percent stake, making them the two principal shareholders.
Email your news TIPS to Editor@kahawatungu.com or WhatsApp +254707482874. You can also find us on Telegram through www.t.me/kahawatungu
