NIC Bank has reported a 9.2 percent y/y decline in profit before tax to Sh5.6 billion, below the estimated Sh6.1 billion.

The bank also reported a decrease in earnings per share by 4.3 percent y/y to Sh6.48 below the estimated Sh6.77 while net loans and advances surged by 4.6 percent y/y to Sh119.8 billion.

Customer deposits rose by 24.2 percent y/y to Sh139.0 billion while net interest income reduced by 11.5 percent y/y to Sh10.8 billion below the expected Sh11.8 billion.

Operating expenses (excluding loan loss provisions) soared by 1.4 percent y/y to Sh6.4 billion compared to the estimated Sh6.7 billion. Additionally, the loan loss provisions decreased by 20.5 percent y/y to Sh3.0 billion compared to the estimated Sh3.5 billion.

Gross non-performing loans surged by 5.4 percent y/y to Sh14.3 billion while the non-performing loan ration surged marginally to 10.7 percent in contrast to the 10.6 percent reported in FY16.

The Board of Directors recommended a dividend of Sh1.00 per share which was the same amount paid to shareholders inFY16. Additionally, the board recommended a 1:10 bonus issue.

“As at the last price of KES 39.00, NIC Bank trades at a P/E of 6.1x and a P/B of 0.7x. Notably, the ROE currently stands at 11.9%,” Kestrel Research notes.

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