NCBA Group posted an 8.78% increase in profit after tax to KSh 5.96 billion for the three months ending March 2026, buoyed by a sustained drop in interest expenses that has significantly strengthened the lender’s net interest income.
Key Highlights:
- Net interest income surged 22.03% to KSh 12.17 billion, driving a 15.38% rise in total operating income to KSh 20 billion.
- The growth was largely fuelled by lower funding costs rather than higher revenues, with interest expenses dropping 49% from their Q1 2024 peak of KSh 10.84 billion following a series of Central Bank of Kenya rate cuts.
- Nedbank Group is set to open its partial pro rata offer for roughly 66% of NCBA’s issued shares on 28 May 2026, with the transaction window closing on 10 July 2026.
Customer deposit costs declined 20% to KSh 5.26 billion despite the bank’s deposit base expanding 9.84% to KSh 544.43 billion.
Profit before tax rose to KSh 7.43 billion, with the Kenyan banking unit remaining the group’s biggest earnings contributor after recording a 20% jump in standalone pre-tax profit to KSh 6.53 billion.
Regional subsidiaries in Uganda, Tanzania, and Rwanda generated a combined KSh 707 million, while non-banking businesses such as investment banking, insurance, and leasing delivered KSh 641 million collectively.
Total assets increased 12.98% year-on-year to exceed KSh 741 billion. The group’s capital adequacy ratio stood at 21.80%, comfortably above the regulatory threshold of 14.50%, while return on average equity remained steady at 18.4%.
However, the lender booked higher credit risk charges during the quarter, with loan loss provisions jumping 56.24% to KSh 2.54 billion. Group Managing Director John Gachora attributed the increase to a cautious credit assessment approach amid a volatile operating environment. Gross non-performing loans also rose 3.95% to KSh 39.28 billion, marking a second straight quarterly increase.
Operating expenses grew 16.63% to KSh 12.25 billion, slightly outpacing income growth and pushing the cost-to-income ratio up to 61.25% from 60.59% a year earlier.
Digitisation remained central to the bank’s operations, with 98% of transactions processed through digital channels during the quarter. The CarDuka vehicle marketplace surpassed 7 million users, supporting NCBA’s 32% share of the asset finance market.
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The group also unveiled NCBA BOOSTA, a digital SME lending product offering financing of up to KSh 35 million, aimed at scaling the KSh 8.30 billion in MSME loans disbursed during the quarter. Meanwhile, assets under management at NCBA Investment Bank rose to KSh 101.50 billion as wealth management customers crossed the 60,000 mark.
The quarterly results come ahead of Nedbank’s planned acquisition offer, which could see the South African lender emerge as the majority shareholder in one of East Africa’s largest banking groups by assets.
