NCBA Group fully acquires loss-making Tanzania unit
NCBA Group has completed the full acquisition of its subsidiary NCBA Bank Tanzania Limited even as it injected Sh2 billion in capital into the unit to boost its operations.
In the latest disclosure, the bank said it grew its stake in the Tanzania unit to 100 per cent last year from 93.44 per cent in 2021 — meaning it bought the remaining 6.56 per cent stake in the unit.
“The group acquired the minority interest share increasing Group ownership to 100 per cent in 2022,” said NCBA without disclosing the value of the deal.
The acquisition means the lender now fully owns all 13 of its subsidiaries operating in Kenya, Uganda, Tanzania, and Rwanda.
The purchase of the 6.56percent stake in the Tanzania unit came in a year in which NCBA made capital injections amounting to Sh3.47 billion into its Tanzanian, Ugandan, and Rwandan subsidiaries to improve their performance amid shocks that were brought by the Covid-19 pandemic.
NCBA injected Sh2 billion in working capital into NCBA Tanzania in 2022, Sh813.49 million into NCBA Uganda, and Sh457.26 million into NCBA Rwanda in the same period.
Capital injections
NCBA’s Tanzanian unit is the only subsidiary that has been making losses year-on-year necessitating capital injections from its parent company.
NCBA Tanzania widened its net loss by 55 per cent to Sh1.78 billion in the year to December 2022 up from a loss of Sh1.15 billion in 2021.
Its net loss in 2021 was also a 49 per cent increase from a loss after tax of Sh770 million in 2020.
In comparison, NCBA Uganda, which made a net loss of Sh483.24 million in 2021, jumped back into profitability to earn Sh767.58 million in net profit in 2022.
NCBA Group earned a profit after tax of Sh13.78 billion in the year to December 2022 and will pay Sh7 billion dividends of Sh4.25 per share.
The Sh7 billion dividend is an equivalent of 50.8 per cent of the net profit, marking increased distribution from the previous year when the Sh4.94 billion was 48.3 per cent of the profits.
The profit increase followed a similarly big jump in its interest income which hit Sh52.4 billion while forex trading revenue jumped to Sh12.4 billion.
The board has recommended a total dividend of Sh4.25 per share, up from Sh3 that was paid previously when the net profit was at Sh10.22 billion — marking the second year running for the lender to increase dividends payout given that it had paid Sh1.50 on 2020 performance.
NCBA Group’s net interest income rose from Sh27.04 billion to Sh30.68 billion, helped by increased lending that took the loan book from Sh244 billion to Sh278.9 billion. BY DAILY NATION
Post a Comment