KCB Group records Sh10.9b in third quarter net earnings
Thursday, November 12th, 2020
PERFORMANCE: KCB Group Plc profit after tax for the nine months ending September dropped by 43 per cent to stand at Sh10.9 billion down from Sh19.2 billion recorded last year.
It said the performance was largely impacted by increased provision on loans and advances in the wake of increased risk of credit default associated with Coronavirus (Covid-19) pandemic.
KCB Group CEO Joshua Oigara described the period as challenging for the business, staff, customers and the economy.
“Our focus has been on keeping our staff and customers safe while at the same time giving business support to the communities we operate in as well as our customers,” he said.
The pandemic, Oigara added, has had a deep socio-economic impact and hence our decision to stand with the group’s stakeholders.
Over the period under review, non-performing loans (NPLS) almost doubled jumping to 15.2 per cent up from 8.3 per cent recorded same time last year. NPLs rose to Sh97 billion up from Sh42.6 billion in 2019.
Consequently, the ratio of NPLs to total loan book increased to 15.2 per cent up from 8.3 per cent in 2019, mainly due to the consolidation of the National Bank of Kenya (NBK) and Covid-19 related downgrades.
Loan loss provisions rose to Sh20 billion from Sh5.8 billion in the previous period, driven by changes in customer risk profiles and impact of the pandemic on macroeconomic drivers.
Despite the dip in profits, the bank’s total income was rose 16 per cent to stand at Sh69.1 billion, compared with Sh59.7 billion reported in September 2019.
Net interest income increased 24 per cent to Sh47.9 billion from Sh38.7 billion, riding on additional interest from investments in Government securities and lending.
Oigara said while the pandemic is far from over and likely to continue, further straining the business and economy, the bank is projecting some recovery as the East Africa region finds some stability.