THE AFRICAN BUSINESS FORTUNE- BANKING SPECIAL REPORT
What next for National Bank of Kenya after Ksh1.2 billion record loss?
By Steve Umidha
The National Bank of Kenya( NBK) had everything‘ moving swiftly’ for its strategic transformation until last year when the government shelved plans to buy shares at the bank and instead ordered an investigation into its activities.
Treasury Principal Secretary Kamau Thugge had in June 2015 asked NBK chief executive Munir Sheikh Ahmed to liaise with the Privatisation Commission to conduct fresh due diligence of the bank’ s dealings.
“ This is to advise that at its meeting held on April 22, 2015, the Cabinet directed a halt to the intended disposal of government shares in NBK until a due diligence is conducted to establish the risks in the process,” Thugge said, in a letter dated May 14, 2015.
Among the issues that were to be investigated are details of bank accounts.
Ten months to date( April 2016) NBK has reported a full year 2015 loss of Ksh1.2 billion or USD11.9 million, and the bank has blamed bad loans for the poor results that rose towards the end of the year.
The bank made the announcement hours after issuing a profit warning, and later admitted that the bad loans had led to a sharp increase in impairment charges.
The result contrasts profit after-tax of Ksh870.7 million the bank recorded a year earlier, which represents a drop of 234.4 per cent attributed which was also blamed bad loans provision, which rose from Ksh525.3 million to Sh3.72 billion.
NBK posted an after-tax profit of Ksh2.2 billion in the nine months to September last year.
The listed lender, majority owned by the government through national social security
National Bank of Kenya chairman Mohamed Hassan before the Investments committee
14 THE AFRICAN BUSINESS FORTUNE MAY- JUNE 2016