National Bank
National Bank 2007 Annualprofits up 72%
National Bank of Kenya pretax profit rose 72% for the financial year ended December 2007 to stand at Ksh.1.6 billion from Ksh.934 million recorded at the end of 2006. This was mainly due to the repayment plan of the Ksh.21 billion government loans through government securities that was announced in the 2007/2008 government budget reading.
National Bank of Kenya pretax profit rose 72% for the financial year ended December 2007 to stand at Ksh.1.6 billion from Ksh.934 million recorded at the end of 2006. This was mainly due to the repayment plan of the Ksh.21 billion government loans through government securities that was announced in the 2007/2008 government budget reading. The repayment plan made interest income to increase by over 717%. These also helped NBK save over Sh1.7 billion (a 74.38%drop) in loan loss provisions. The bank used the Ksh.21 billion to buy Treasury bonds, which are less risky than the government loan.
Customer deposits grew to Ksh.34.7 billion from Ksh.29.5 billion in 2006. The bank’s loans and advances to customers went down during the year by 57% from Sh26.4 billion to Sh7.8 billion.
The banks total assets went up 14.65% mainly due to a 355% increase in Balances due from Central bank of Kenya, 460% increase in Kenya Government Securities and 227% increase in Deposits and balances due from local banking institutions.
Share Activity
NBK did not declare any dividend as it has to shed-off some of the accumulated losses over the years which at present stand at Ksh.2.6 billion. In 1999 the bank incurred pre tax losses of Sh3.4 billion which the bank has been repaying over the years, hence denying shareholders dividends.
Product development
NBK plans to role out new products as well as reaching out to the un-banked population in the face of increased competition in the financial sector. The bank will embark on an extensive marketing plan and expansion to areas they deem underserved.
Financial Statements
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NATIONAL BANK OF KENYA LTD Bank Income statement |
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FOR THE YEAR ENDED 31st December 2007 |
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31/12/2007 |
31/12/2006 |
06 vs. 07 |
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Ksh.’000 |
Ksh.’000 |
% Change |
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Interest income |
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|
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Loans and advances |
1,912,745 |
4,507,158 |
-57.56% |
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Government securities |
1,684,187 |
206,043 |
717.40% |
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Deposits and placements with banking Inst. |
95,467 |
38,523 |
147.82% |
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Other Interest Income |
- |
- |
|
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Total interest income |
3,692,399 |
4,751,724 |
-22.29% |
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Interest Expense |
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Customer deposits |
752,047 |
773,626 |
-2.79% |
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Deposits and placements from the banking Insti. |
22,432 |
27,813 |
-19.35% |
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Other |
- |
- |
|
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Total Interest Expenses |
774,479 |
801,439 |
-3.36% |
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Net interest Income/(Loss) |
2,917,920 |
3,950,285 |
-26.13% |
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Other operating Income |
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Fees and commissions on loans and advances |
60,565 |
35,792 |
69.21% |
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Other fees and commissions |
1,052,010 |
945,144 |
11.31% |
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Foreign exchange trading income/(loss) |
135,388 |
166,304 |
-18.59% |
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Dividend income |
- |
- |
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Other income |
515,239 |
275,538 |
86.99% |
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Total Non-Interest Income |
1,763,202 |
1,422,778 |
23.93% |
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Total Operating income |
4,681,122 |
5,373,063 |
-12.88% |
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Other Operating Expenses |
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Loan loss provision |
594,806 |
2,321,732 |
-74.38% |
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Staff costs |
1,495,494 |
1,204,461 |
24.16% |
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Directors’ emoluments |
44,540 |
36,166 |
23.15% |
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Rental charges |
46,331 |
48,654 |
-4.77% |
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Depreciation charge on property and equipment |
113,983 |
140,809 |
-19.05% |
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Amortization charges |
26,168 |
45,852 |
-42.93% |
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Other operating expenses |
749,716 |
641,212 |
16.92% |
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Total operating Expenses |
3,071,038 |
4,438,886 |
-30.82% |
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Profit /( loss) before tax and exceptional items |
1,610,084 |
934,177 |
72.35% |
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Exceptional Items |
- |
- |
- |
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Profit/(loss) after exceptional items |
1,610,084 |
934,177 |
72.35% |
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Current tax |
(123,712) |
- |
- |
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Deferred tax |
(366,976) |
(309,681) |
18.50% |
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Profit/(loss) after exceptional items |
1,119,396 |
624,496 |
79.25% |
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NATIONAL BANK OF KENYA LTD Bank Balance sheet |
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FOR THE YEAR ENDED 31st December 2007 |
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31/12/2007 |
31/12/2006 |
06 vs. 07 |
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Ksh.’000 |
Ksh.’000 |
% Change |
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ASSETS |
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Cash (Both local and foreign) |
1,277,240 |
904,180 |
41.26% |
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Balances due from Central bank of Kenya |
2,423,573 |
531,721 |
355.80% |
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Kenya Government Securities |
22,276,618 |
3,977,796 |
460.02% |
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Foreign Currency, Treasury bills and bonds |
- |
- |
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Deposits and balances due from local banking institutions |
2,708,873 |
826,689 |
227.68% |
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Deposits and balances due from banking Insti. abroad |
1,153,527 |
805,916 |
43.13% |
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Government and other securities held for dealing purposes |
- |
- |
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Tax recoverable |
- |
7,562 |
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Loan and advances to customers(net) |
7,843,915 |
26,490,524 |
-70.39% |
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Investment securities |
9,116 |
9,116 |
0.00% |
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Balances due from group companies |
- |
- |
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Investment in associates |
- |
- |
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Investment in subsidiary companies |
19,963 |
19,963 |
0.00% |
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Investment in joint ventures |
- |
- |
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Investment in properties |
- |
- |
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Property and equipment |
1,098,072 |
1,071,077 |
2.52% |
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Prepaid lease rentals |
12,207 |
12,355 |
-1.20% |
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Intangible assets |
38,036 |
47,824 |
-20.47% |
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Deferred tax asset |
- |
246,153 |
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Retirement benefit asset |
- |
- |
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Other assets |
2,553,132 |
1,171,967 |
117.85% |
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TOTAL ASSETS |
41,414,272 |
36,122,843 |
14.65% |
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LIABILITIES |
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Balance due to Central bank of Kenya |
- |
- |
- |
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Customer deposits |
34,721,680 |
29,516,701 |
17.63% |
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Deposits and balances due to local banking insti. |
79,492 |
170,952 |
-53.50% |
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Deposits and balances due to foreign banking Institutions |
- |
- |
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Other money market deposits |
- |
- |
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Borrowed funds |
66,427 |
133,495 |
-50.24% |
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Balances die to group companies |
21,976 |
21,976 |
0.00% |
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Tax payables |
116,150 |
- |
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Dividends payable |
109,564 |
271,267 |
-59.61% |
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Deferred tax liability |
120,823 |
- |
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Retirement benefit liability |
- |
- |
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Other liabilities |
1,210,925 |
2,160,613 |
-43.95% |
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Total liabilities |
36,447,037 |
32,275,004 |
12.93% |
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Shareholders funds |
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Paid Up/Assigned capital |
6,675,000 |
6,675,000 |
0.00% |
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Share premium |
370,585 |
370,585 |
0.00% |
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Revaluation reserve |
469,549 |
480,335 |
-2.25% |
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Retained Earnings/(Accumulated losses) |
(2,603,421) |
(4,289,352) |
-39.31% |
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Statutory Loan Loss Reserve |
55,522 |
611,271 |
-90.92% |
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Propose dividends |
- |
- |
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Capital grants |
- |
- |
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Total shareholders’ Funds |
4,967,235 |
3,847,839 |
29.09% |
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Total Liabilities & Shareholders’ Fund |
41,414,272 |
36,122,843 |
14.65% |
Management commentary
Consolidation
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Consolidated financial statements have not been prepared as the subsidiary companies are dormant and the amounts involved are not material.
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Profit before tax improved by 72% from Ksh. 934 m to Ksh. 1,610 million.
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The directors do not recommend the payment of a dividend.
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The above balance sheet and profits and loss accounts are extracts from the audited financial statements, which were approved by the Board of Directors on Tuesday, 25th March 2008.
Annual General Meeting
Notice is herby given that the thirty-Ninth Annual General Meeting of the shareholders of National Bank of Kenya Limited will be held at the KICC –Tsavo Ballroom/ Plenary Hall, Nairobi on Friday, 27th June 2008 at 11 a.m. The annual report and financial statements will be posted to members on the register at the close of business on Monday, 26th May 2008. The register of members will be closed for one day on Wednesday, 21 May 2008 for the purpose of dispatch of the annual report and financial statements.
Company Secretary
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