Prime Bank Group recently disclosed a remarkable surge in its net profit, marking a growth of 19.8 percent to reach Sh4.4 billion for the fiscal year ending in December 2023, showing a substantial improvement from the previous year's figure of Sh3.6 billion. This increase in profitability was primarily a result of escalating revenues and strategic cost-cutting initiatives implemented by the bank.
The bank's operating income experienced a 7.1 percent rise, climbing to Sh9.2 billion from Sh8.5 billion, with a significant contribution coming from the surge in net interest income, which soared to Sh6.5 billion from Sh5.8 billion. On the other hand, the non-funded income of the lender remained steady at Sh2.6 billion. Prime Bank also managed to decrease its non-interest-related expenses by 5.8 percent, predominantly due to a reduction in provisioning for anticipated credit losses, dropping to Sh522.6 million from Sh635.4 million.
This decline in provisions for credit losses has been linked to a consistent non-performing loans ratio, despite an evident increase in gross Non-Performing Loans (NPLs). Prime Bank's CEO, Rajeev Pant, expressed satisfaction with the bank's performance, highlighting that their net non-performing loans stood at about three percent of the bank's book, showcasing strong credit appraisal practices and conservative policies upheld by the organization. The bank concluded the year with an asset base of Sh168.6 billion, witnessing growth in net loans and advances to customers which rose to Sh55.8 billion from Sh40.9 billion. Moreover, customer deposits also saw a significant increase, reaching Sh127.1 billion from Sh107.1 billion in the previous year.
Furthermore, as part of their efforts to enhance operations, Prime Bank upgraded its core banking system during the year, focusing on improving security measures and expediting transaction processing times for their clients. This technological advancement signifies the bank's commitment to staying at the forefront of innovation in the financial sector and prioritizing customer experience through streamlined services.