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National Bank of Kenya Falls Most in Five Years: Nairobi Mover

March 25 (Bloomberg) -- National Bank of Kenya Ltd., a state-controlled lender, retreated the most in more than five years after it said profit dropped 53 percent last year.

The shares plunged 10 percent to 20.25 shillings by the 3 p.m. close in the capital, Nairobi, the biggest decline since January 2008, according to data compiled by Bloomberg. More than 108,000 shares traded, or 1.8 times the three-month daily average.

Net income fell to 729.8 million shillings ($8.5 million) in the 12 months through December, compared with 1.55 billion shillings a year earlier, Managing Director Munir Ahmed told reporters today. Total interest expenses were 3.66 billion shillings from 1.38 billion shillings in 2011, he said.

High interest rates weighed on National Bank’s profit and customer deposit costs rose 166 percent, Nairobi-based Standard Investment Bank Ltd. said today in an e-mailed note to clients.

For all lenders, the average interest rate paid to customers for deposits rose to 8.71 percent in November from 7.66 percent in January 2012, according to data from the Central Bank of Kenya.

Today’s decline pared National Bank’s gain this year to 17 percent, underperforming the Nairobi Securities Exchange All-Share Index’s rise of 20 percent.

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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