National Bank of Kenya blames bad loans for Sh1.2bn loss
What you need to know:
- NBK acting managing director Wilfred Musau said the reduction in profits resulted from heavy bad debt provisions and higher interest expenses.
National Bank of Kenya has reported a surprise Sh1.2 billion loss for the year ending December 31, 2015 compared with a profit of Sh1.3 billion in the same period last year.
The bank attributed the loss to heavy provisions and a loan impairment charge that increased by Sh3.2 billion over the period.
The bank’s non-performing loan portfolio is said to have skyrocketed in the final quarter of 2015.
NBK acting managing director Wilfred Musau said the drop in profits resulted from heavy bad debt provisions and higher interest expenses.
“Increasing provisions is a prudent practice in accounting. We have further put elaborate steps in place to manage the recovery of this position, ” Ms Musau said.
The bank, which had issued a profit warning, sent home six top managers including chief executive Munir Ahmed to pave the way for an internal audit.
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