Centenary Bank profit after tax fell by 8.7% to Shs100.27bn in the year ended December 31, 2017, down from Shs109.9bn recorded in 2016.
According to the 2017 results released by Centenary Bank on Friday, the fall in profit is largely due to increased Non-Performing Loans (NPLs) and bad loans written off.
In total, Centenary Bank customers have failed to pay back Shs80.2bn.
This is because the bank wrote off Shs18bn in 2017, up from Shs11.2bn in 2016. Further, NPLs increased by 42.7% to Shs62.2bn in 2017, up from Shs35.6bn recorded in the previous year.
However, Centenary still has a chance to recover the Shs62.2bn in NPLs by squeezing borrowers to meet their loan obligations or through selling their security mainly land and buildings.
It should be noted that industry NPLs have increased in recent years due to high interest rates and a sluggish economy that have seen many borrowers fail to meet their loan obligations.
The bank’s total expenditure also increased to Shs377.48bn from Shs315.9bn in 2016.
However, other key performance parameters were impressive.
Headed by Fabian Kasi as Managing Director, Centenary’s total income increased to Shs514.78bn in 2017, up from 463.8bn in 2016.
Customer deposits also increased to Shs1.9 trillion in 2017, up from Shs1.6 trillion in 2016, while loans advanced to customers rose to Shs1.3 trillion from 1.24 trillion in 2016.
The bank’s total assets also increased to Shs2.7 trillion in 2017, up from 2.3 trillion in 2016.
As a result of a dip in profit, Centenary bank shareholders will share Shs25.18bn in dividends, down from Shs27.59bn in 2016.
