NCBA invests Ksh3.5 billion in subsidiaries, fully acquires Tanzanian unit

In the fiscal year ended December 31, NCBA Group invested an additional Sh3.47 billion in its regional subsidiaries in order to increase its share of profits generated outside of Kenya.

According to the lender’s most recent disclosures, the value of its subsidiary investments increased to Sh74.08 billion from Sh70.61 billion a year ago, with the Tanzania unit accounting for more than half of the capital injection.

NCBA Group says it invested Sh2 billion in NCBA Bank Tanzania in a transaction that saw it buy out minority shareholders’ 6.56 percent stake.

“The group acquired the minority interest share, increasing group ownership to 100 percent,” says NCBA in the annual report.

NCBA has gradually increased its stake in the Tanzanian unit, from 75.91 percent in 2019 to 93.44 percent in 2021, and is now fully owned.

The lender invested Sh814 million and Sh458 million in its Ugandan and Rwandan subsidiaries, respectively, and another Sh200 million in Kenya-based Loop DFS, formerly Bantech Limited.

The latest investments bring the total amount of money invested in subsidiaries by NCBA Group to Sh6.98 billion since 2019.

The lender ended the year with a Sh7.08 billion investment in Tanzania and Sh4.94 billion and Sh3.33 billion investments in Uganda and Rwanda, respectively.

It had invested Sh2.33 billion in 2021, up from Sh860.3 million in 2020 and Sh312.97 million the previous year.

The additional capital injection brought the total investment value in the three subsidiaries to Sh12.05 billion, with Tanzania leading the way with Sh5.08 billion.

Profits after taxes

Net losses from subsidiaries fell from Sh1.56 billion to Sh545 million during the review period, with only the Tanzanian unit remaining in the red. The subsidiary’s net loss increased from Sh1.16 billion to Sh1.78 billion.

Uganda’s unit improved from a loss of Sh483.24 million to a net profit of Sh767.6 million, while Rwanda’s net profit increased from Sh83.4 million to Sh467.1 million.

The Kenyan unit’s net profit increased from Sh11.8 billion to Sh14.32 billion.

NCBA Group’s board of directors increased dividend payments for the second year in a row after net profit increased by 35% to Sh13.78 billion.