The lender reported spending Ksh.200 million on a Staff Voluntary Exit program that compensated affected employees. The amount has been recorded as an unusual expense in the Group’s quarterly report.
As part of a streamlining effort to strengthen the Tanzanian division, NCBA Group has let go of 100 workers. The lender announced on Thursday that it had paid out Ksh.200 million in severance to employees who had been let go as part of a Staff Voluntary Exit program.
The amount has been recorded as an extraordinary expense in the Group’s quarterly financial report as of the third quarter of 2018. NCBA has reduced its workforce by a significant amount, shut down several of its branches in Tanzania, and recorded additional loan-loss impairments to account for loan defaults that have pushed the unit into the red.
Following this trend, NCBA Tanzania has reported a larger loss of Ksh.900 million in the nine months to September, up from a loss of Ksh.400 million at the same stage in 2021.
Since NCBA’s earnings in Uganda and Rwanda have increased by more than twofold thanks to recoveries on impaired loans, especially in Uganda’s market, the Tanzanian unit has been the only NCBA subsidiary to incur losses during the period.
Only the Tanzanian unit dragged down NCBA’s regional subsidiaries’ performance, bringing the nine-month deficit to Ksh.100 million from Ksh.1.3 billion in the prior year. With the Tanzanian operations resolved, NCBA expects its subsidiaries to be better anchored, and thus able to contribute at least 10% of Group profitability.
In comparison to NCBA’s total profit before tax (PBT) of Ksh.18.9 billion, Kenya continues to be the bank’s most profitable market. After suffering losses due to defaults triggered by the COVID-19 pandemic, NCBA disclosed earlier this year that it had channeled Ksh.2 billion to the unit to bolster its capital.
