NBK posts Sh275 million net profit in Q1 2025 as non-interest income declines

National Bank of Kenya registered a profit after tax of Sh275 million in the quarter ending March 2025, buoyed by lower operating expenses and consistent net interest earnings, even as non-funded income fell sharply.

The lender’s total operating income dropped to Sh3.1 billion, weighed down by a 27 per cent year-on-year decline in non-funded income.

Nevertheless, net interest income held steady at Sh2.4 billion, demonstrating resilience in the bank’s core revenue stream.

Interest expenses shrank to Sh1.3 billion, marking a 9 per cent decrease from the same period in 2024.

The bank attributed the reduction to declining market interest rates and a scale-down in borrowing costs.

At the same time, operating costs were trimmed by 5 per cent, falling from Sh2.3 billion to Sh2.1 billion.

The savings were achieved through cost containment measures initiated earlier, which helped buffer the effects of reduced income from non-interest activities.

Loan loss provisions, however, rose by 13 per cent, signalling a more guarded approach to credit risk management.

The bank’s net loans and advances to customers closed the quarter at Sh70.7 billion, while customer deposits remained solid at Sh103 billion.

NBK Managing Director George Odhiambo said the quarter’s performance highlighted the bank’s resilience in a difficult operating climate.

"The performance for this first quarter demonstrates the bank’s continued resilience in the face of economic uncertainties," Odhiambo stated.

"We have maintained stability in our core interest income and managed our costs effectively, despite a dip in non-funded income and a reduction in the loan book size." 

"We remain focused on executing our strategic priorities, deepening customer relationships, revenue diversification, and driving sustainable growth across our business operations.”

NBK is now looking to consolidate gains through expanded product offerings and enhanced customer engagement.

With an eye on sustainable growth, the bank intends to deepen its presence across individual, SME, and corporate banking segments.

Management also signalled a shift towards improving operational efficiency and customer satisfaction, positioning these pillars as critical to navigating Kenya’s shifting financial landscape.

The lender’s performance comes at a time when the broader banking sector is contending with tighter margins, subdued loan demand, and growing credit risks, forcing institutions to revisit their strategies for revenue growth and risk containment.