Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Pretax profit at NIC Bank rises 15 percent

22 August 2013, 14:19

Nairobi -  Earnings at NIC Bank rose 15 percent in the first half as lower interest rates cut its costs of borrowing more than they hurt the bank's own interest income.

NIC Bank, which also operates in Tanzania and Uganda, said it made a first-half pretax profit of KES 2.6 billion ($29.8 million).

Eric Musau, an analyst at Standard Investment Bank, said the mid-tier bank benefited from having to pay less interest to its depositors, many of whom are corporate clients that command high rates on their deposits, and for its own market borrowings.

"Lending rates in the economy have come down and that is good for smaller banks which hold large expensive deposits," Musau said.

Official lending rates in Kenya have come down since inflation fell and the central bank began a cycle of monetary easing in mid-2012, which has more than halved key interest rates to the current 8.5 percent.

NIC said net interest income rose 36 percent to KES 3.4 billion due to a 30 percent fall in the amount it paid out as interest to depositors to KES 2.1 billion, despite a fall in the amount of loan advances.

The lender's total interest income dropped by just 4 percent to KES 5.6 billion.

Earnings per share rose to KES 3.44 from KES 2.93 previously, NIC Bank said in a statement.

The bank declared an interim dividend of KES 0.25 per share. Its share price had gained 0.9 percent to KES 57.50 each by 1022 GMT.

"As long as the cost of lending doesn't go up we expect the bank to perform well in the second half," Musau said.

($1 = 87.4000 Kenyan shillings)

- Reuters


Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Submitted by
Victor Tinto
Leave ODM if you are unhappy, Rai...

Leave ODM if you are not happy, Raila Odinga tells Senator. Read more...

Submitted by
Victor Tinto
Former Assistant Minister joins J...

A former Assistant Minister has quit PNU and joined the Jubilee Party. Read more...

Submitted by
Victor Tinto
DP Ruto intervenes as Kerio Valle...

DP William Ruto will visit Kerio Valley to try solve never-ending clashes between local residents. Read more...

Submitted by
Wilson Ochieng
ODM MP chased down by angry Kibra...

Kibra MP Ken Okoth had a hard time in his constituency after angry youth pelted him with stones. Read more...

Submitted by
Wilson Ochieng
Prepare for DP Ruto fight in 2022...

An MP has warned that the Kalenjin Community will not stand back and watch as DP Ruto is duped ahead of the 2022 polls. Read more...

Submitted by
William Korir
Be careful who you deal with, DP ...

Watch out for your political future, DP William Ruto has been warned. Read more...