Prime Bank’s net profit jumps 20pc to Sh567m

Prime Bank has reported a 20.4 percent jump in net profit for the first quarter ended March on higher interest and transaction-based income.

The lender’s profit stood at Sh567.7 million in the period compared to Sh471.5 million a year earlier.

Prime Bank’s total interest income jumped 12.8 percent to Sh2.1 billion in the period largely on account of higher income from lending to government which rose 51.29 percent to Sh1 billion during the review period.

Income from loans and advances to customers dropped 14.09 percent or by Sh166 million to Sh1 billion in the period under review.

The lender also benefited from growth in non-funded income, which went up 24.47 percent to Sh507.8 million in the quarter from Sh408 million a year earlier.

This came as the lender’s total operating expenses jumped 17.81 percent to Sh953.4 million.

Prime Bank recently received new capital investments of Sh5.1 billion from private equity firms AfricInvest and Catalyst Principal Partners.

The institutional investors took a 24.2 percent stake in the deal that the bank said will help fund growth.

Prime Capital is listed as the bank’s second-biggest shareholder with a 14.36 per cent stake while Jamson Ltd, Crason Ltd, Nason Ltd, Prime Trustees and Capital Nominees hold 8.02 per cent equity each.

There has been an increase in bank mergers and acquisitions in the past few years, motivated by a desire to cut costs and beef up capital in the wake of interest rate controls and more stringent regulation.

Other pending deals include NIC’s tie-up with CBA, KCB’s proposed acquisition of National Bank of Kenya (NBK).