NIC Group has reported a 9 per cent growth in net earnings to Sh4.5 billion, for the year ending December 2015 compared to Sh4.1 billion in 2014.
NIC Bank’s Group Managing Director, John Gachora said the bank’s growth in earnings was largely driven by its focus on the retail segments, channels and transactional products offering in line with the Bank’s long term strategy.
“The bank rolled out an ambitious strategic plan in 2015, to target more retail and SME business and we have started reaping the fruits of our investments. Of our various business lines Retail Banking experienced the biggest growth in profitability,” Mr Gachora said.
The initiatives saw 19 per cent rise in operating income to Sh13.8 billion as the bank sought to boost non-funded income lines.
NIC grew its branch network to 27 in Kenya with the opening of 3 new branches in Machakos, Lunga Lunga in Nairobi’s Industrial Area, and Sifa Towers in the Kilimani area of Nairobi.
The branch expansion plan targeting more retail and SME customers caused a 12 per cent increase in deposits to Sh112.4 billion as the bank plans for more this year.
“Our branch expansion will continue in 2016 to ensure we offer our customers with more points of access to the bank. By 2018, our target is to have 50 branches across Kenya. We are also focused on increasing the product holding per customer and introducing new innovative products into the market to cater for them.” Mr Gachora said.
In December 2015, the bank concluded agreements towards a Sh5.56 billion (€50 million) credit line from the European Investment Bank (EIB) to support the private sector in Kenya through lending to Small and Medium Enterprises (SMEs).
Its subsidiaries in Tanzania, Uganda, NIC Capital (Investment Banking), NIC Insurance Agents (Bancassurance) and NIC Securities (Brokerage) all contributed positively to the group’s financial results announced on Wednesday.
The Ugandan arm opened its second branch in May 2015 and received a capital injection worth Sh330 million to finance expansion from the group. The one in Tanzania also received a long term loan of Sh700 million from Proparco, a private sector financing arm of Agence Francise de Development (AFD), towards strengthening the bank’s position in corporate and SME segments in Tanzania.
The bank attributed the slow rise in profitability to the increased loan loss provisions which jumped four fold from Sh329 million to Sh1.6 billion in the year.
NIC Board has recommended a final dividend of Sh1, bringing the total dividend for the year to Sh1.25. This amounts to a total dividend pay-out of Sh800 million for the year under review, a 25 per cent climb from 2014.