Five commercial banks record Sh77.6b net profit
EARNINGS: As commercial banks in Kenya continue releasing their annual financial results for year ended December 31, 2019, what appears to be emerging among them is the need to diversify as well as invest in digital platforms.
The reality comes to light even as the top five listed banks on the Nairobi Securities Exchange (NSE) delivered pre-tax profit of Sh77.6 billion during the year.
According to the banks’ annual financial reports, Equity Group Holding, KCB Group, Standard Chartered Bank, Co-op Bank and Diamond Trust Bank (DTB) posted exemplary results in 2019.
However, while Equity Group and Co-operative Bank registered remarkable improvements by recording a 14 per cent and 12.6 per cent profit growth respectively, KCB Group, which grew by a 4.9 per cent in profits still, got the highest amount.
KCB Group tops the banks with an after tax profit of Sh25.2 billion, Equity Group Holdings with Sh22.6 billion, Co-op Bank Sh14.3 billion, StanChart Bank Sh8.2 billion, while DTB received Sh7.3 billion.
Analysts say the performance was exceptional in many ways despite the decline in the interest rate mainly due to the capping, which most experts, contended was anomaly in a country – which described itself to be a free market economy.
Nearly all the commercial banks adopted their own models of business which yielded different returns during the year.
“No bank implemented the same model and realised the same returns,” one analyst said.
KCB Group’s net profits of Sh25.2 billion was attributed to the different fortunes – mainly from the non-funded income, loan growth and cost management.
However, for Equity Group Holding chief executive officer, James Mwangi, said the non-funded income contributed 40 per cent of the group’s total income.
