NCBA Bank and Group Financial Results Q1 2020
On 1 October 2019 NIC Group PLC (NIC) and Commercial Bank of Africa Limited (CBA) completed the merger of both institutions; the transaction was accounted for in accordance with IFRS 3 - Business Combinations. The Q1 2020 financial statements of the Bank are prepared on a prospective basis (a continuation of CBA), representing 3 months performance of NCBA Bank (merged bank) for 2020 while the prior year comparatives are those of CBA Bank. The consolidated financial statements are also a continuation of the financial statements of CBA with an adjustment to capital to reflect the legal capital of NIC. The prior year comparatives are those of CBA. Merger related costs are included in the comprehensive income statements and are disclosed as exceptional items. The planned integration in the other jurisdictions where NCBA Group has a presence is ongoing and is expected to be completed by the close of the third quarter.
The Board is of the view that in the first half of 2020, global economic growth has been negatively impacted by the spread of COVID-19 and the resulting disruption of economic activity. Further, it is still too early to assess the extent of the impact of the COVID-19 pandemic, whose negative effects on the Kenyan and regional economies began to be felt in the first quarter of the year, NCBA will continue to support our customers, look after our people, manage our Group in line with the interests of our shareholders, and play our part in limiting the impact of this virus in our communities. NCBA is determined to collaborate with all our stakeholders to confront this challenge. In response to COVID-19 pandemic and in addition to efforts across the Group to support our staff, customers and community, we made an initial Shs 100 million philanthropic commitment to help those most affected by humanitarian challenges. We will continue to focus on areas where we can help the most vulnerable in the short and long term.
On 20th April 2020 the Board announced that it was changing its earlier recommendation to pay a cash dividend, and instead would recommend to the shareholders a bonus share issue. The decision was made considering the need to preserve capital for the benefit of our customers and shareholders, especially in light of the challenge posed by the COVID-19 pandemic. The proposed Bonus issue is one (1) share for every ten (10) shares held. The Bonus shares will be issued to the shareholders registered on the Company’s register at the close of business on 12th May 2020 upon approval of the Capital Markets Authority and the shareholders of the Company. These financial statements are extracts from the books of NCBA Group PLC. The complete set of quarterly financial statements, statutory and qualitative disclosures can be accessed on the institution’s website www.ncbagroup.com. They may also be accessed at the institution’s head office located at NCBA Centre, Mara and Ragati Road, Upper Hill.
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The Group produced a resilient performance in 2019, achieving a full year Group net profit of Shs 7.8 billion, compared to Shs 5.0 billion in 2018. The adjusted Group net profit, excluding integration costs and merger-related amortization of intangibles, was Shs 11.3 billion, broadly in line with the previous year combined performance on a proforma basis of the two Banks. This is a notable achievement in a year of transition.