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NIC Bank profits soar despite a surge in bad debts provisions

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NIC Bank Group’s pretax profit rose 3 percent in 2015 and the lender plans to nearly double its branch network to tap faster growing markets such as retail banking, it said on Wednesday.

The mid-tier lender renowned for asset financing said profit before tax rose to 6.4 billion shillings from 6.23 billion shillings in 2014, despite a surge in provisions for bad debts.

The bank said it would increase the number of outlets in Kenya to 50 by 2018 from 27 at the end of last year.

“NIC bank will continue rolling out its strategic shift of the business towards the retail and SME (small and medium enterprise) space, a move that is aimed at ensuring future sustainable growth and returns,” it said in a statement.

In 2015, NIC’s bad debt provisions soared to 1.65 billion shillings from 329 million shillings after the central bank raised rates in the middle of the year, sending commercial interest rates as high as 25 percent.

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The bank raised its dividend per share for the year by a quarter to 1.25 shilling, including an interim dividend of 0.25 shillings already paid. Earnings per share slipped to 7.00 shillings from 7.07 shillings a year earlier.

NIC has operations in neighbouring Uganda and Tanzania. It also operates an investment bank, an insurance agency and a securities brokerage.

Source: Reuters

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