National Bank of Kenya customers are profiting from Kenya’s volatile economy. According to the Bank’s Managing Director, Reuben Marambii, customers have been getting higher interest rates on their deposits due to inflation. Loans and advances from the company have therefore declined owing to the high cost of lending and borrowing.
The bank’s unaudited results state that profits fell 10 per cent for the year ended 30th June 2012. Marambii said that the drop was caused by high interest rates paid on customer deposits during the past six months.
The bank made a profit of KES 575 million which is down from KES 640 million the previous year. The Board of directors reports that the fall was likely caused by an increase in operating expenses. The bank also paid 5 times more interest to depositors than it did the previous year.
Despite the decline in profits, the bank’s total assets were up 7.3% since the same period last year. During the bank’s AGM for the first quarter of this year, investors received a dividend of KES 0.15 per share. They will not, however, get an interim dividend for this announcement period.