NCBA Group records 124% jump in net profits

NCBA Group PLC, a leading financial institution in Kenya, has achieved a remarkable 124% increase in net earnings for the financial year ending on December 31, 2021. The group's net earnings surged from 4.6 billion Kenyan shillings in 2020 to an impressive 10.2 billion Kenyan shillings in 2021, showcasing a substantial growth trajectory. In an exclusive interview with CNBC Africa, the Group Managing Director, John Gachora, shed light on the key factors that propelled NCBA's robust performance and outlined the strategic initiatives driving the company's expansion and growth across African markets. Key Themes: The key theme of the interview revolved around NCBA Group's stellar financial results, underpinned by strong business growth, effective cost management, and a focus on digital innovation. With a sharp focus on increasing accessibility and leveraging digital solutions to cater to evolving consumer needs, NCBA Group is poised for further success and expansion in the region. Key Points: 1. Strong Business Growth: John Gachora attributed NCBA Group's exceptional financial performance to a combination of factors, including a significant 6% growth across all business lines. The group's funded and non-funded income both witnessed a 6% increase, underscoring the overall growth momentum. Moreover, prudent provisions management, with provisions decreasing from 20 billion in 2020 to 12 billion in 2021, has contributed to enhancing the company's profitability. 2. Digital Innovation and Consumer Behavior: The surge in digital disbursements, with a notable increase of 35% to 584 billion, reflects changing consumer behavior and an uptick in digital transactions. The shift towards digital loan products has been particularly notable, with consumers increasingly relying on digital channels for financial transactions. The recovery in digital disbursements was fueled by the reopening of schools and businesses, especially benefiting small businesses dependent on digital channels for daily loans. 3. Expansion Strategies and Market Performance: NCBA Group's expansion into African markets such as Uganda, Rwanda, Tanzania, and Ivory Coast has been a key focus area for the company. While performance in various markets varied, efforts are underway to enhance profitability and market presence through strategic partnerships. The company remains optimistic about turning around markets like Uganda and Tanzania, with a focus on refining business models and addressing market-specific challenges. Quote: John Gachora highlighted NCBA Group's growth prospects and expansion plans, stating, 'We are truly number three in the region, and we continue to grow into a major and look forward to being a bigger, more profitable entity.' The Group's commitment to digital innovation, prudent financial management, and strategic partnerships positions it as a key player driving financial inclusion and economic growth across Africa. Looking ahead, NCBA Group's strategic vision and focus on sustainable growth are poised to further solidify its position as a leading financial institution in the region.