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National Bank of Kenya Drops on Profit Plunge: Nairobi Mover

Nov. 21 (Bloomberg) -- National Bank of Kenya Ltd. fell to the lowest level in five weeks after the state-owned lender said profit plunged 67 percent.

The shares retreated 0.3 percent to 18.25 shillings by the close in the capital, Nairobi, the lowest level since Oct. 16. About 9,500 shares traded, or 37 percent of the three-month daily average.

Profit slumped to 397 million shillings ($5 million) in the nine months through September from 1.23 billion shillings a year earlier, the lender said yesterday. Interest expenses surged to 2.9 billion shillings from 766.4 million shillings, it said.

“It’s declining basically because of the earnings,” Faith Atiti, an analyst at Nairobi-based NIC Securities Ltd., said by telephone today. “Their interest expenses grew almost four times, operating expenses were not controlled because they increased 26 percent and their loan loss provision is higher than most banks.”

National Bank has declined 10 percent this year,making it the worst-performing lender in the Nairobi Securities Exchange All-share Index. The gauge has rallied 36 percent this year.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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