Genghis Capital - NCBA Group Plc (NIC) NIC Group Plc (NSE: NIC) 3Q18 Earnings Note

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Genghis Capital

Gerald Muriuki

EUR 27.42 For Business Accounts Only

NIC Group Plc (NSE: NIC) 3Q18 Earnings Note

NIC Group Plc (NSE: NIC) released 3Q18 financial results reporting a 4.1% y/y decline in Profit after Tax (PAT) to KES 3.2Bn. The decline was primarily attributed to Net Interest Income (NII) which decreased 5.9% y/y, following a 22.2% y/y rise in interest expense which outpaced the 5.5% y/y growth in interest income. Non-interest Revenue (NIR) grew 7.2% y/y to KES 3.4Bn compared to KES 3.2Bn in 3Q17. Total operating expenses remained muted, declining 2.1% y/y, attributed to a 25.4% decrease in Loan Loss Provisions (LLP), while staff costs rose 8.4% to KES 2.6Bn. The balance sheet remained flat (+0.4% y/y) mainly due to the 3.1% y/y decline in the loan book. We maintain our BUY recommendation on NIC Group Plc at a target price of KES 34.89. This represents an upside potential of 54.0% from the current market price of KES 22.65. Below are the key highlights.

30/11/2018 5 EN

Underlying

NCBA Group Plc

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KE0000000406 Nairobi Securities Exchange Kenya

Provider

Genghis Capital

Genghis Capital is an innovative and customer focused Investment Bank licensed by the Capital Markets Authority (CMA). Founded in 2008, Genghis is one of the leading investment banks in Kenya. Since its establishment, Genghis has achieved tremendous growth to offer a well-diversified portfolio of financial services that includes:

i. Securities(Equity/Debt) Trading
ii. Research
iii. Wealth Management services
iv. Investment Advisory & Management via the GenCap Unit Trusts
v. Corporate Finance & Transaction Advisory services

The Kenyan Capital Markets continue to develop in size, scope and sophistication. With this is an increasing demand for more specialized and personalized brokerage service and we at Genghis Capital are glad to be able to offer you this service. Our strength lies in ensuring our clients are up to speed with developments at the stock market and the economy. Research and technology remains our competitive and comparative advantage hence Experience, Expertise and Professionalism are some of the qualities you can expect from our team.

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Analysts

Gerald Muriuki

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NIC Group Plc (NSE: NIC) 3Q18 Earnings Note

Kenya Banks: Sector Q3 21 PBT jumps 68% yoy, and outlook for Q4 is positive too

Kenya banks: Lucrative SME potential undercut by low yields and asset quality

Safaricom, KCB and NCBA earnings to be boosted by strong H1 21 Fuliza growth

Genghis Cross-Asset Weekly Strategy - 8th February 2021

East African Breweries Ltd (NSE: EABL) 1H21 Earnings Note

KenGen Company Plc (NSE: KEGN) FY20 Earnings Note

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