Kampala, Uganda | ENTEBBENEWS.NET | NCBA Group Plc has posted a 12.2% increase in first-half profit as East Africa’s economic recovery fueled lending and customer deposits, helping the regional lender offset a sharp increase in provisions set aside against potentially bad loans.
Net income rose to KSh12.4 billion in the six months ended June 30 from KSh11 billion a year earlier, the regional bank said Wednesday. Pre-tax profit climbed 14.3% to KSh15.5 billion, while operating income rose 15.1% to KSh40.7 billion.
The performance underscores the resilience of East Africa’s banking sector despite persistent inflationary pressures, elevated borrowing costs and cautious monetary policy across the region.
NCBA, which operates in Uganda, Kenya, Tanzania and Rwanda, expanded its balance sheet during the period, with customer deposits rising 11% to KSh551 billion and total assets increasing 11.5% to KSh739 billion.
The lender’s board approved an interim dividend of KSh3.75 per share, a 50% increase from KSh2.50 declared a year earlier, signalling confidence in earnings and capital generation.
The results, however, were tempered by a rise in loan-loss provisions, which climbed to KSh5.2 billion from KSh3.2 billion as the bank increased reserves against a more uncertain operating environment.
“The first half of 2026 was marked by a dynamic operating environment with pressure on inflation and a cautious policy approach by the regional central banks,” Group Managing Director, John Gachora said.
“Our balance sheet momentum remained strong, anchored on disciplined growth in quality lending and stable funding provided by customer deposit growth,” he said.
We have increased provisions to KSh5.2 billion reflecting the realities of the current operating environment, which positions us well to absorb potential risks.”
The group’s capital position also remained robust. Its capital adequacy ratio stood at 21.7%, well above regulatory requirements, while return on average equity reached 19%.
“We are encouraged by the strength of our return on average equity while maintaining a strong capital adequacy position, providing a solid foundation to support future growth and strategic investment opportunities,” Gachora said.
Digital banking continued to be one of the lender’s fastest-growing businesses. Digital loan disbursements rose 26.9% to KSh819 billion, while mobile banking accounted for 94% of all customer transactions.
NCBA invested KSh2.4 billion in technology during the period to strengthen artificial intelligence capabilities, cybersecurity and digital infrastructure, helping maintain system availability of 99.68%.
Kenya remained the group’s largest earnings market, with the banking subsidiary reporting a 24.3% increase in profit to KSh13.7 billion. Regional operations in Uganda, Tanzania and Rwanda generated a combined KSh1.6 billion in profit, supported by a 25% increase in lending.
Its diversified businesses—including investment banking, leasing, insurance and bancassurance—reported combined earnings of KSh1.1 billion, up 40% from the previous year.
NCBA also expanded its assets under management to KSh101 billion, while its SME loan portfolio grew 12% to KSh44.7 billion, reflecting continued demand for business credit across the region.
Investors are also closely watching the lender’s proposed acquisition involving South Africa’s Nedbank Group, one of the largest banking transactions in the region this year.
NCBA said the tender offer closed on July 10 after attracting shareholder acceptances equivalent to 121% of the targeted shares. Completion of the transaction remains subject to regulatory approvals and other closing conditions.
Looking ahead, Gachora said global economic uncertainty could weigh on growth prospects, although he expects stronger private-sector credit demand and regional expansion opportunities to support the group’s performance in the second half of the year.
“While the global macroeconomic environment signals uncertainty leading to a softer growth projection of 3.1% for 2026, the investor landscape remains vibrant with major regional expansion transaction deals expected to close in the second half of the year,” he said.
“We remain confident in our ability to unlock new growth opportunities that will generate enduring value for customers, shareholders and the communities we serve.”
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