KCB Group’s nine-month profits jumps to Ksh25b

Thursday, November 18th, 2021 00:00 | By
KCB group chief executive and managing director Joshua Oigara. The group’s balance sheet expanded by 12 per cent to Sh764.3 billion. PD/ALICE MBURU

KCB Group more than doubled its profit after tax to Sh25.2 billion for the nine months ended September 2021. It represents a 131 per cent spike from Sh10.9 billion announced in a similar period last year, according to a statement issued by the lender yesterday.

Group Chief Executive and Managing Director Joshua Oigara described the performance as the strongest since the onset of Covid-19 pandemic in March last year, mirroring the country’s economic recovery.

“While we are cautiously optimistic of the prospects, especially due to the dynamic nature of the healthcare crisis, we project that the worst is behind us,” he said.

Oigara attributed the stellar performance to cost management, cash preservation and driving sustainable business growth, in addition to supporting the group’s customers through the crisis which helped them pick up from the subdued business environment.

This, he said, enabled the lender to record a 16 per cent rise in total income to Sh79.9 billion, on account of higher interest income driven by an increase in earning asset, higher non-interest income driven by increased transactional volumes and Forex income as well as lower cost of funding.

Expenses also rose by 9 per cent to Sh34.7 billion on account of increased staff costs that were partially offset by a decrease in operating expenses, as the group rolled out cost management initiatives to ring-fence the business from the impact of the pandemic

During the period, the cost of risk improved to 200 basis points driven by reduced provisions in corporate and digital loans, while the ratio of non-performing loans (NPL) decreased from 15.1 to 13.7 per cent.

“Provisions were 53 per cent lower to end the period at Sh9.3 billion from Sh20 billion a similar period last year,” said Oigara.

Rose marginally

KCB said the stock of NPL rose marginally to Sh98.1 billion, from Sh97 billion posted the same period last year mainly from KCB Bank Kenya and partially offset by a reduction in National Bank of Kenya, KCB Bank Rwanda, and KCB Bank Tanzania stock.

Total assets increased by 15 per cent to Sh1.12 trillion, driven by organic growth across the lender’s businesses and acquisition of Banque Populaire du Rwanda (BPR), with customer deposits jumping 11 per cent to Sh859 billion largely due to organic growth in Kenya.

Gross loans rose 12 per cent to Sh718 billion on account of improved lending in Kenya, Uganda, and Rwanda, while shareholders’ equity grew 20 per cent from Sh136 billion to Sh163 billion on improved profit for the period.

Total capital stood at Sh173.5 billion, representing a total capital to risk-weighted assets ratio of 20.6 per cent well above regulatory minimum of 14.5 per cent, while the group’s core capital as a proportion of total risk-weighted assets closed the period at 17.3 per cent against the Central Bank of Kenya’s statutory minimum of 10.5 per cent.

The directors have approved an interim dividend of Sh1 for every ordinary share of Sh1 held, with the dividend expected to be paid by January 14, 2022 to shareholders who will have been registered by December 9, 2021.

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