KCB doubles half year profit to Ksh.15.3 billion
Published on: August 19, 2021 08:40 (EAT)
KCB Group has doubled its earnings through the first six months of 2021, posting a 101 per cent growth in net profit for the period to Ksh.15.3 billion. The astronomical surge in profitability from Ksh.7.6 billion at the same stage in 2020 is largely attributable to higher operating income and a reduction in overall costs. KCB’s total operating income has for instance increased by 13.8 per cent to Ksh.51.2 billion from a flat Ksh.45 billion in June 2020 on the back of strengthened income streams. The lender’s net interest income has for instance increased to Ksh.36.4 billion from Ksh.31.1 billion while non-interest funded income (NFI) has surged by 5.7 per cent to Ksh.14.8 billion. At the same time, KCB has trimmed its non-interest based overhead costs to Ksh.29.3 billion after cutting its loan loss provision costs by 40 per cent to Ksh.6.6 billion in the period. However, KCB’s gross non-performing loans (NPLs) have swelled to Ksh.95.7 billion from Ksh.83.9 billion last year. Meanwhile, KCB has hit the bull’s eye on its goal of having a Ksh.1 trillion balance sheet having missed the mark at the end of last year. The bank now has an asset base of Ksh.1.022 trillion which comprises of Ksh.607 billion in net loans and advances to customers. The Group’s customer deposits have also marked a steady increase to Ksh.786 billion from Ksh.758.2 billion previously. Subsequent to the remarkable turnaround in earnings from last year, KCB Group earnings per share have improved to Ksh.8.53 from Ksh.5.33. Nevertheless, KCB board of directors have not recommended the payment of an interim dividend for the period. KCB Group Chairman Andrew Kairu has termed the performance as resilient even as he expects further growth by leveraging improving macro-economic conditions across its markets. “The outlook remains positive as economic activity normalizes across the East African region,” he said. KCB Group Managing Director Joshua Oigara meanwhile says the bank will remain focused on enhancing customer experiences as the lender looks forward to its next phase of growth. “Enhancing customer experiences remains at the heart of our business and we continue to boost this through the adoption of digital technologies. We also seek to build a long-term business by integrating sustainability to our business model,” he said. Oigara further says the Group has taken the resolve to flip the devastation of the COVID-19 pandemic to its advantage as economies and firms begin to re-emerge from the global health crisis. “Crisis gives you an opportunity for growth as we now see a positive economic outlook across the region. This for me is a sweet spot.” KCB Group is expected to close the acquisition of Atlas Mara assets in Rwanda and Tanzania which include the acquisition of controlling stakes in the Bank Populaire du Rwanda (The Popular Bank of Rwanda) and the African Banking Corporation (ABC) Tanzania. The first of the acquisitions in Rwanda is set to close imminently.