NCBA Investment Bank

NCBA Investment Bank

5/27/2025, 8:26:48 AM

ABSA Bank reported a *3.7%* y/y growth in PAT to *KES 6.17Bn* for Q12024, driven by effective cost containment and operational efficiency, despite a decline in both net interest income and non-interest income. ✅*Earnings*: Net interest income declined marginally by 1.1% to KES 11.26Bn, primarily due to a significant reduction in income from loans and advances. This was partially offset by higher earnings from government securities. Non-interest income fell by 11.1% to KES 4.5Bn, reflecting reduced transactional volumes and fee-based income. ✅*Loan book*: Loans and advances to customers dropped by 5.6% to KES 308.38Bn, indicating tighter credit deployment during the period. Consequently, the loan-to-deposit ratio decreased to 83%, down from 92%, highlighting a more conservative lending stance. ✅*Customer Deposits*: Customer deposits rose by 4.6% y/y to KES 371.12Bn. The growth was supported by intensified deposit mobilization efforts, including the expansion of the agency banking network, enhancement of digital banking platforms, and aggressive retail customer acquisition strategies.

NCBA Investment Bank

5/27/2025, 6:37:16 AM

In the News:  Chaotic US trade shifts leave markets wary: https://www.reuters.com/business/global-markets-view-europe-2025-05-27/  Shares mixed, dollar struggles on Trump's chaotic tariffs: https://www.reuters.com/world/china/global-markets-wrapup-1-2025-05-27/  Euro could become the dollar's alternative: https://www.reuters.com/world/europe/euro-could-become-dollars-alternative-lagarde-says-2025-05-26/  Dollar stutters as US tax bill stirs anxiety over debt; yen gains: https://www.reuters.com/world/africa/dollar-stutters-us-tax-debate-grinds-yen-gains-2025-05-27/  Oil falls as higher OPEC+ output expectations weigh on sentiment: https://www.reuters.com/business/energy/oil-edges-down-potential-higher-opec-output-eyed-2025-05-27/  Gold hovers near two-week high on dollar weakness, US fiscal woes: https://www.reuters.com/world/india/gold-hovers-near-two-week-high-dollar-weakness-us-fiscal-woes-2025-05-27/

NCBA Investment Bank

5/27/2025, 1:08:06 PM

⏺️ secondary bond market turnover *increased* to *KES 16Bn* from *KES 9Bn* ⏺️ The *FXD1/2017/10Yr* was the day’s most traded bond with a weighted average traded yield of *11%* ⏺️ The local currency traded against the U.S. dollar at 129.25 ⏺️ on a year to date, the shilling has appreciated by *0.05%* to the U.S. dollar

NCBA Investment Bank

5/27/2025, 10:38:21 AM

*I&M Group Kenya* reported a profit after tax (PAT) of KES 3.93Bn for the Q125, representing an 18.1% y/y increase, driven by double-digit growth in both interest and non-interest income. Earnings per share rose to KES 2.37, reflecting improved shareholder returns. ✅Earnings: Net interest income rose by 11.8% to KES 11.26Bn, supported by increased yields on interest-earning assets. Non-interest income grew by 13.7% to KES 3.59Bn, reflecting stronger performance in fees, commissions, and trading income. The combined effect led to an 18.1% jump in PAT. ✅Loan book: Loans and advances to customers increased slightly by 0.7% to KES 293.66Bn, reflecting cautious credit growth amidst a tighter lending environment. The loan-to-deposit ratio declined to 72%, down from 76%, indicating a more conservative lending approach. ✅Customer Deposits: Customer deposits rose by 6.0% y/y to KES 407.04Bn. The growth was supported by intensified deposit mobilization efforts and expansion network.

NCBA Investment Bank

5/27/2025, 6:25:23 AM

*Jambojet taps Sh1.7bn NCBA loan for aircraft leases and maintenance* Budget airline Jambojet tapped a Sh1.72 billion loan from NCBA Group in the financial year ended December 2024 to restructure leases and maintain aircraft engines. Jambojet’s parent company Kenya Airways (KQ), which guaranteed the four-year loan, discloses that the facility attracts an average interest of 18.5 percent per annum, pointing to the tight credit conditions that borrowers grappled with last year. The airline spent the loan on prepayment of lease rental arrears worth Sh1.42 billion and the balance on funding the maintenance of aircraft engines. Source: Business Daily

NCBA Investment Bank

5/27/2025, 1:03:55 PM

Greetings, Find today’s market highlights below: The market was up with NASI recording an increase of 0.26% to 132.71 Shares traded decreased by 19% to 14Mn, with equity turnover also decreasing by 43% to KES 225Mn KPLC led in volume (4Mn shares), while Safaricom in value (KES 70Mn). Foreign participation stood at 24%, with net foreign buys of KES 37Mn, mainly in Safaricom, Equity and BAT TPS Eastern Africa (+10.00%), Longhorn and Home Afrika led the gainers, while EA Cables (-6%), Sanlam and Olympia capital were the biggest losers.

NCBA Investment Bank

5/28/2025, 5:32:54 AM

*AfDB slashes Africa’s 2025 growth forecast on tariffs* Africa’s economic output is expected to grow by 3.9 percent this year, the African Development Bank said in its annual African Economic Outlook report on Tuesday, quickening from last year’s pace of 3.3 percent. However, this year’s forecast— which covers economies of all its 54 member states—represents a 0.2 percentage points downgrade from the bank's initial forecast, the development lender said during its annual meeting in Ivory Coast, mainly due to the shocks caused by new trade tariffs imposed by the united States. The bank, which is Africa’s biggest development lender with $318 billion in capital, also cut its initial 2026 growth forecast by 0.4 percentage points to 4.0 percent, citing the same uncertainty from trade tariffs. *_Source: Business Daily_*

NCBA Investment Bank

5/28/2025, 5:30:32 AM

*World Bank seeks 38pc tax rate for top earners* The multilateral lender is pushing for the creation of a new tax band for the top earners to fill the hole in the public finances that will be created by reducing the tax rate for all monthly pay below Sh166,677. It seeks the creation of six tax bands from the current five in a shift that will eliminate the 30 percent tax rate. Currently, workers earning above Sh500,000 a month pay 32.5 percent in income taxes, and those making above Sh800,000 pay a top rate of 35 percent The World Bank plans to ease the pain of workers earning less than Sh480,000 monthly as salary rises continued to lag inflation or cost of living measure for the fifth year in a row, weakening workers' purchasing power and their standards of living. _*Source: Business Daily*_

NCBA Investment Bank

5/27/2025, 6:23:18 AM

*Cooking gas company Koko gets Sh23 billion World Bank insurance* A World Bank-backed guarantee fund has disclosed a Sh23.21 billion ($179.64 million) guarantee to Koko Networks to cushion the energy firm against risks as it expands in the Kenyan market. Multilateral Investment Guarantee Agency (MIGA)— the guarantee arm of the World Bank— said the security, agreed in March this year, will run for up to 15 years and covers Koko against civil strife, seizure of its land for public use and breach of contract in its Kenyan operations. Source: Business Daily