KCB Group closed the first nine months of the year with a net profit of Sh46.02 billion, a 3.4 per cent increase from Sh44.5 billion recorded in the same period last year. The growth was mainly supported by higher interest income, though the bank’s performance still trails rivals such as Equity and Cooperative Bank.
Interest income from loans rose 12.4 per cent to Sh104.34 billion from Sh92.8 billion, driving the overall earnings.
However, the absence of revenue from National Bank of Kenya (NBK), which KCB sold to Nigeria’s Access Bank on May 30, and a fall in non-interest income, slowed the pace of profit growth.
“Despite a tough operating environment in all our markets, we have delivered a strong performance showing the resilience of the Group. We continue to execute our business strategy that is anchored on ‘Transforming Today Together’ and build an agile business that is targeted at transforming the lives of our customers and delivering value for our shareholders and all other stakeholders,” said Paul Russo, KCB Group CEO.
Non-interest income dropped 10.1 per cent to Sh45.09 billion, largely because foreign exchange trading earnings fell 40.1 per cent to Sh8.24 billion from Sh13.76 billion.
The bank noted that digital channels helped shield non-funded income, which faced pressure from declining fees and commissions in the Democratic Republic of Congo following branch closures.
Operating costs rose marginally by 2.1 per cent to Sh87.35 billion, reflecting a 7.3 per cent increase in staff expenses to Sh31.49 billion and a 2.6 per cent rise in loan loss provisions to Sh18.25 billion.
KCB’s group non-performing loans (NPLs) ratio improved to 17.8 per cent from 18.5 per cent, benefiting from loan recoveries and the NBK sale valued at about $106.9 million (Sh13.81 billion). Gross loans overdue by at least three months fell to Sh215.3 billion from Sh225.69 billion.
The contribution from subsidiaries to the net profit fell to 32.4 per cent from 36.6 per cent in the prior year. KCB Bank Kenya, the main unit, recorded a six per cent rise in net profit to Sh33.79 billion from Sh31.75 billion.
TMB, the group’s most profitable foreign unit, saw earnings drop slightly by one per cent to Sh7.62 billion. Rwanda’s BPR rose 16 per cent to Sh2.77 billion, Tanzania increased 15 per cent to Sh2.35 billion, and Uganda grew four per cent to Sh1.37 billion.
Although KCB’s profit growth lags Equity Group, which posted a 32.6 per cent jump in net earnings to Sh52.1 billion from Sh39.2 billion, the lender’s leadership remains optimistic.
“The group is well positioned to navigate the impacts in the operating environment to deliver the best outcome for all our stakeholders,” said KCB Group chairman Joseph Kinyua.
