The Board of Directors of NIC Group PLC is pleased to announce the Audited financial results of the Group and

Bank for the period ended 31st December, 2017.

I STATEMENT OF FINANCIAL POSITION

BANK COMPANY GROUP
31st Dec, 2017 31st Dec, 2016 31st Dec, 2017 31st Dec, 2017 31st Dec, 2016
Audited Audited Audited Audited Audited
Shs '000 Shs '000 Shs '000 Shs '000 Shs '000
A ASSETS
1 Cash ( both Local & Foreign) 1,601,159 1,585,835 1,200,000 1,923,174 1,919,377
2 Balances due from Central Banks 6,541,951 4,360,474 - 7,592,957 5,344,124
3 Kenyan Government securities held for dealing purposes - - - - -
4 Financial assets at fair value through profit & loss - - - 617,872 227,600
5 Investment Securities:
a) Held to Maturity
a. Kenya Government securities 21,577,580 3,491,163 - 21,577,580 3,491,163
b. Other securities - - - 1,753,872 2,273,216
b) Available for sale:
a. Kenya Government securities 29,917,488 23,795,496 - 29,917,488 23,795,496
b. Other securities - - - 948,767 911,020
6 Deposits and balances due from local banking institutions - 1,163,270 - 32,784 1,456,867
7 Deposits and balances due from banking institutions abroad 11,434,450 8,055,566 - 12,392,284 8,225,341
8 Tax recoverable 201,179 - 34,822 395,513 137,003
9 Loans and advances to customers (net) 112,322,028 107,097,133 - 119,760,537 114,466,274
10 Balances due from banking institutions in the group 1,730,189 1,375,189 - - -
11 Investments in associates - - - - -
12 Investments in subsidiary companies - 5,357,701 29,118,705 - -
13 Investments in joint ventures - - - - -
14 Investment properties - - - - -
15 Property and equipment 1,024,458 861,294 - 1,148,712 1,043,497
16 Prepaid lease rentals 6,750 6,875 - 522,750 522,875
17 Intangible assets 1,054,318 605,547 - 1,580,310 1,071,441
18 Deferred tax asset 3,125,493 2,545,664 - 3,418,176 2,752,871
19 Retirement benefit asset - - - - -
20 Other assets 2,279,830 1,546,144 53,955 2,589,684 1,820,820
21 TOTAL ASSETS 192,816,873 161,847,351 30,407,482 206,172,460 169,458,985

B LIABILITIES
22 Balances due to Central Banks - - - - -
23 Customer deposits 130,560,881 104,160,200 - 138,916,570 111,824,685
24 Deposits and balances due to local banking institutions 11,442,430 72,764 - 11,442,430 72,764
25 Deposits and balances due to foreign banking institutions 2,584 2,554,801 - 696,065 2,703,162
26 Other money market deposits - - - - -
27 Borrowed funds 17,025,858 18,976,920 - 17,025,858 19,965,484
28 Balances due to banking institutions in the group 139,541 50,807 - - -
29 Tax payable - 446,766 - 5,045 455,649
30 Dividends payable - 35,599 22,388 22,388 35,599
31 Deferred tax liability - - - - -
32 Retirement benefit liability - - - - -
33 Other liabilities 4,707,876 5,261,231 61,685 3,347,867 4,056,278
34 TOTAL LIABILITIES 163,879,170 131,559,088 84,073 171,456,223 139,113,621

C SHAREHOLDERS' FUNDS
35 Paid up /Assigned capital 15,000,000 3,199,728 3,199,728 3,199,728 3,199,728
36 Share Premium 9,446,004 2,700,017 2,700,017 2,700,017 2,700,017
37 Revaluation reserves - 175,202 - - 175,202
38 Retained earnings 3,533,108 22,686,358 23,783,718 27,815,058 23,012,504
39 Statutory loan reserves 943,716 961,793 - 1,042,359 1,238,486
40 Other reserves 14,875 (74,781) - (1,154,389) (1,126,374)
41 Proposed dividends - 639,946 639,946 639,946 639,946
42 Capital grants - - - - -
28,937,703 30,288,263 30,323,409 34,242,719 29,839,509
43 Non-controlling interests - - - 473,518 505,855
44 TOTAL SHAREHOLDERS' FUNDS 28,937,703 30,288,263 30,323,409 34,716,237 30,345,364
- - - - -
45 TOTAL LIABILITIES AND SHAREHOLDERS' FUNDS 192,816,873 161,847,351 30,407,482 206,172,460 169,458,985
#REF! #REF! -

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II STATEMENT OF COMPREHENSIVE INCOME
BANK COMPANY GROUP
12 Months 4 Months 8 Months 12 Months 4 Months 12 Months 12 Months
to to to to to to to
31st Dec, 2017 31st Dec, 2017 31st Aug, 2017 31st Dec, 2016 31st Dec, 2017 31st Dec, 2017 31st Dec, 2016
Audited Audited Audited Audited Audited Audited Audited
Shs '000 Shs '000 Shs '000 Shs '000 Shs '000 Shs '000 Shs '000
1 INTEREST INCOME
1.1 Loans and advances 12,202,914 4,017,876 8,185,038 14,212,910 - 13,145,500 15,150,632
1.2 Government securities 4,720,018 1,976,016 2,744,002 3,214,229 - 5,210,043 3,735,870
1.3 Deposits and placements with banking institutions 67,001 20,727 46,274 82,388 - 59,879 134,173
1.4 Other interest income - - - - - - -
1.5 TOTAL INTEREST INCOME 16,989,933
- 6,014,619
- 10,975,314
- 17,509,527
- -- 18,415,422
- 19,020,675
-
2 INTEREST EXPENSE
2.1 Customer deposits 5,537,054 2,066,545 3,470,509 4,986,572 - 5,955,774 5,368,231
2.2 Deposits and placement from banking institutions 289,619 195,759 93,860 195,890 - 319,111 246,731
2.3 Other interest expenses 1,312,159 444,348 867,811 1,147,440 - 1,366,735 1,237,116
2.4 TOTAL INTEREST EXPENSE 7,138,832 2,706,652 4,432,180 6,329,902 - 7,641,620 6,852,078
3 NET INTEREST INCOME 9,851,101
- 3,307,967
- 6,543,134
- 11,179,625
- -- 10,773,802
- 12,168,597
-
4 NON - INTEREST INCOME
4.1 Fees and commissions on loans and advances 1,276,434 413,246 863,188 1,117,156 - 1,404,759 1,215,324
4.2 Other fees and commissions 803,446 274,352 529,094 710,909 - 890,335 795,027
4.3 Foreign exchange trading income 1,092,920 343,386 749,534 1,030,462 - 1,158,930 1,105,147
4.4 Dividend income - - - - - - -
4.5 Other income 471,199 177,391 293,808 634,389 46,708 710,316 904,061
4.6 TOTAL NON-INTEREST INCOME 3,643,999 1,208,375 2,435,624 3,492,916 46,708 4,164,340 4,019,559
5 TOTAL OPERATING INCOME 13,495,100 4,516,342 8,978,758 14,672,541 46,708 14,938,142 16,188,156

6 OPERATING EXPENSES
6.1 Loan loss provision 2,779,913 1,048,287 1,731,626 3,711,702 - 2,979,723 3,749,530
6.2 Staff costs 2,516,271 844,140 1,672,131 2,605,349 23,358 3,177,296 3,222,493
6.3 Directors' emoluments 143,345 32,125 111,220 159,076 21,349 196,489 174,638
6.4 Rental charges 237,750 85,480 152,270 221,239 - 372,434 370,057
6.5 Depreciation charge on property and equipment 200,796 66,341 134,455 191,673 - 274,698 277,906
6.6 Amortisation charges 188,557 47,563 140,994 191,670 - 222,540 221,937
6.7 Other operating expenses 1,752,431 659,728 1,092,703 1,666,322 750 2,114,012 2,004,646
6.8 TOTAL OPERATING EXPENSES 7,819,063 2,783,664 5,035,399 8,747,031 45,457 9,337,192 10,021,207
7 Profit before tax and exceptional items 5,676,037 1,732,678 3,943,359 5,925,510 1,251 5,600,950 6,166,949
8 Exceptional items - - - - - - -
9 PROFIT AFTER EXCEPTIONAL ITEMS 5,676,037 1,732,678 3,943,359 5,925,510 1,251 5,600,950 6,166,949
10 Current tax (2,108,423) (380,550) (1,727,873) (3,161,441) 34,822 (2,121,835) (3,226,335)
11 Deferred tax 579,829 (193,328) 773,157 1,378,078 - 665,303 1,389,782
12 PROFIT AFTER TAX AND EXCEPTIONAL ITEMS 4,147,443 1,158,800 2,988,643 4,142,147 36,073 4,144,418 4,330,396

13 Other Comprehensive Income:

13.1 Exchange differences on translation of foreign operations - - - - - (148,994) 50,300
13.2 Fair value changes in available-for-sale financial assets 984,072 14,875 969,197 491,662 - 120,979 418,458
13.3 Revaluation surplus on property, plant and equipment - - - - - - -
13.4 Share of comprehensive income of associates - - - - - - -
13.5 Income tax relating to components of other comprehensive income - - - - - - -
14 OTHER COMPREHENSIVE INCOME FOR THE YEAR NET OF TAX 984,072 14,875 969,197 491,662 - (28,015) 468,758
15 TOTAL COMPREHENSIVE INCOME FOR THE YEAR 5,131,515 1,173,675 3,957,840 4,633,809 36,073 4,116,403 4,799,154

EARNINGS PER SHARE- BASIC & DILUTED (Shs) 6.48 - - 6.47 0.06 6.48 6.77
INTERIM DIVIDEND PER SHARE - DECLARED (Shs) -- -- -- 0.25
- -- -- 0.25
-
FINAL DIVIDEND PER SHARE - DECLARED (Shs) - - - 1.00 1.00 1.00 1.00

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III OTHER DISCLOSURES
BANK COMPANY GROUP
31st Dec, 2017 31st Dec, 2016 31st Dec, 2017 31st Dec, 2017 31st Dec, 2016
Audited Audited Audited Audited Audited
Shs '000 Shs '000 Shs '000 Shs '000 Shs '000

1.NON-PERFORMING LOANS AND ADVANCES

(a) Gross Non-performing loans and advances 13,264,825 12,650,315 - 14,320,960 13,587,912
(b) Less Interest in Suspense 1,214,317 683,839 - 1,282,160 704,080
(c)TOTAL NON-PERFORMING LOANS AND ADVANCES (a-b) 12,050,508 11,966,476 - 13,038,800 12,883,832
(d) Less Loan Loss Provision 4,922,952 4,728,028 - 5,265,710 5,022,089
(e) NET NON-PERFORMING LOANS AND ADVANCES(c-d) 7,127,556 7,238,448 - 7,773,090 7,861,743
(f) Discounted Value of Securities 7,127,556 7,238,448 - 7,773,090 7,861,743
(g) NET NPLS EXPOSURE (e-f) - - - - -

2.INSIDER LOANS AND ADVANCES

(a) Directors, shareholders and associates 571,342 498,100 - 678,070 600,169
(b) Employees 2,249,290 1,932,600 - 2,275,960 1,958,897
(c)TOTAL INSIDER LOANS AND ADVANCES AND OTHER FACILITIES 2,820,632 2,430,700 - 2,954,030 2,559,066

3.OFF-BALANCE SHEET ITEMS

(a) Letters of credit, guarantees, acceptances 14,504,043 16,401,719 - 14,700,202 16,595,287
(b) Forwards, Swaps and options 12,052,253 14,043,849 - 12,052,253 14,043,849
(c) Other contingent liabilities - - - 546,883 1,068,674
(d)TOTAL CONTINGENT LIABILITIES 26,556,296 30,445,568 - 27,299,338 31,707,810

4.CAPITAL STRENGTH
(a) Core capital 27,651,530 25,379,908 - 33,417,167 28,942,838
(b) Minimum Statutory Capital 1,000,000 1,000,000 - 1,000,000 1,000,000
(c) Excess (a-b) 26,651,530 24,379,908 - 32,417,167 27,942,838
(d) Supplementary Capital 5,312,857 6,503,528 - 5,411,500 6,780,221
(e) TOTAL CAPITAL (a+d) 32,964,388 31,883,436 - 38,828,667 35,723,059

(f)TOTAL RISK WEIGHTED ASSETS 165,647,097 147,419,229 - 174,375,225 155,044,871

(g) Core Capital / Total deposits liabilities 21.18% 24.36% - 24.06% 25.88%
(h) Minimum statutory ratio 8.00% 8.00% - 8.00% 8.00%
(I) Excess (g-h) 13.18% 16.36% - 16.06% 17.88%

(j) Core Capital / Total risk weighted assets 16.69% 17.22% - 19.16% 18.67%
(k) Minimum statutory ratio 10.50% 10.50% - 10.50% 10.50%
(l) Excess (j-k) 6.19% 6.72% - 8.66% 8.17%

(m) Total Capital / Total risk weighted assets 19.90% 21.63% - 22.27% 23.04%
(n) Minimum statutory ratio 14.50% 14.50% - 14.50% 14.50%
(o) Excess (m-n) 5.40% 7.13% - 7.77% 8.54%

5. LIQUIDITY
(a) Liquidity Ratio 46.72% 38.52% - 48.23% 38.74%
(b) Minimum statutory ratio 20.00% 20.00% - 20.00% 20.00%
(c) Excess (a-b) 26.72% 18.52% - 28.23% 18.74%

MESSAGE FROM THE DIRECTORS

GROUP REORGANISATION
On 1 September 2017 NIC Bank Limited completed its restructuring into a Non-Operating Holding Company. This followed receipt of the requisite approvals by shareholders and bondholders, as well as regulatory authorities including
Central Bank of Kenya, Capital Markets Authority and the National Treasury. NIC Bank Limited also completed its change of name to NIC Group PLC.
The New Operating entity NIC Bank Kenya PLC has been in operation for 4 months as at the date of these results. For ease of comparison the Kenyan Banking Business performance for 12 month’s to 31 December 2017 has been combined.

DIVIDENDS AND BONUS SHARE

The Board has resolved to recommend to the shareholders for their approval at the forthcoming Annual General Meeting, scheduled for 25th May 2018:

a) the payment of a first and final dividend for the year of Shs 1.00 per ordinary share, which will be payable to the shareholders registered on the Company’s register at the close of business on 30th April 2018. Upon receipt of shareholders’
approval, the dividend will be paid on or immediately after 25th May 2018; and

b) subject to regulatory approval, the issuance of bonus shares of one (1) new fully paid up bonus share of par value Shs 5.00 for every ten (10) ordinary shares of par value Shs 5.00 to be issued to the shareholders registered on the Company’s
register at the close of business on 30th April, 2018. Upon receipt of the requisite approvals, shareholders will be credited with the bonus shares on or immediately after 25th May 2018. The Bonus shares will not be entitled to receive any
dividend declared and approved for the year.

These financial statements are extracts from the books of the institution as audited by PricewaterhouseCoopers and received unqualified opinion.
The complete set of audited financial statements, statutory and qualitative disclosures can be accessed on the institution's website www.nicgroup.com. They may also be accessed at the institution's head office located at NIC House, Masaba
Road, Nairobi.
NIC Group PLC and NIC Bank Kenya PLC are regulated by the Central Bank of Kenya.
BY ORDER OF THE BOARD
L MURAGE
GROUP COMPANY SECRETARY
21 MARCH 2018 3 of 3