National Bank Shareholders approve bonus shares

Nairobi, March 27th, 2015 – National Bank today held the 46th Annual General Meeting

of the shareholders in Nairobi. The meeting gave a nod to the issuance of bonus shares

(one ordinary share for every ten ordinary shares held). The Chairman of the Board of

Directors, Mohamed Hassan explained that the year’s profits would be used to meet

the regulatory capital that came into effect in January 2015.

Mr. Hassan also informed the shareholders that the bank was hopeful that approval would be granted for the planned rights issue in the course of the year,

adding that the Bank’s balance sheet had grown significantly in the last two years and

as result the bank had optimally utilized its capital. “The bank now requires additional

capital to facilitate further balance sheet growth”, he said.

The Managing Director& CEO, Munir Sheikh Ahmed, told the shareholders that the Bank

had recorded an operating profit of Ksh. 2.4 billion, 34 percent up from the Ksh. 1.8

billion posted in the previous year. He added that the results were mainly attributable to

a realization of the transformation program that has led to balance sheet growth,

better management of costs and prudent management of credit.

The Bank’s business grew significantly in the year under review, gaining across all main

customer segments. Loans and advances to customers grew to Ksh. 65.6 billion, an

increase of Ksh. 26.1 billion, translating to a 66% year on year growth. Customer deposits

also grew from Ksh. 78.0 billion to Ksh. 104.7 billion, a 34% year on year increase.

Mr. Ahmed said that the positive financial growth is an indication that the bank’s

Transformation Strategy was beginning to bear fruits. The Bank now has a healthy and

growing business portfolio, is better customer focused, and is more efficient and gaining

momentum towards attaining the strategic ambition of becoming a top tier bank.

The business divisions set up under the Transformation Program i.e. Retail, Business,

Islamic, Corporate & Institutional Banking, Treasury, Bancassurance, Investor Services,

Micro Finance and Chinese business, have all contributed to the robust balance sheet

and profits growth registered by the bank in 2014, as well as achieving a Compounded

Annual Growth Rate (CAGR) of 45% in operating profits, which is significantly higher

than the targeted CAGR of 33% set to achieve top tier bank status by 2017. The business

is now well diversified and there is growth on all fronts.

Mr. Ahmed said that in 2014, the Bank expanded its network across the country which

now consists of both physical traditional channels and electronic digital channels. In

2014, 15 new branches were opened to bring the total to 75 branches across the

country. The ATM network grew by 26 to 123 ATMs. In addition, the Bank has also signed

up Agency relationships with Posta, PostBank, Defco as well as its own proprietary

agents bringing total agents to 1,120. Last year the bank also signed up strategic

partners such as Kenswitch and pesapoint giving customers’ access to a total of 1,325

ATMs. The Bank has leveraged on technology to expand the scope and reach of the

distribution network by launching a new Mobile Banking (NatMobile) and Internet

Banking (NatConnect) platforms. These platforms provide customers with faster and

convenient transactions 24/7.

Mr. Ahmed concluded by saying that the bank would upgrade the technology

platform to meet the requirements of the planned business volume growth, meet risk

management requirements and enhance customer service delivery. “We shall continue

to build on the growth momentum we have established, remain focused on executing

the transformation strategy initiatives and drive the organizational changes needed to

realize our goal of transforming National Bank of Kenya into a leading bank that is

highly profitable to its shareholders, provides rewarding careers to its employees,

participates in community development and positively contributes to economic

development.”

About National Bank

National Bank is a fully fledged Commercial Bank listed on the Nairobi Securities

Exchange and established in 1968 to provide Kenyans access to finance. It has since

grown to be one of the largest commercial banks in the country with staff of1,531, a

growing network of 75 branch outlets across the country, 123 ATMs and electronic

channels of Mobile and Internet Banking. National Bank participates in Corporate

Banking, Business Banking, Retail Banking and Islamic Banking with an extensive

portfolio of products and financial solutions tailored for the requirements of a broad

spectrum of customer segments it serves.

Incase of any queries/clarification please contact

Bernadette Ngara

Director, Marketing and Corporate Communications

Mobile: +254 (0) 711038869, or 2828869

Email: bwngara@nationalbank.co.ke