kcb

KCB Group PLC’s profit after tax surged 54.6pc to Sh9.9 billion in the three months ending March 2022, a rise from Sh6.4 billion in a similar period last year. This was boosted by growth in total income and a reduction in loan loss provision.

Revenues increased by 26.0pc to Sh29.0 billion on account of an increase in interest income, an increase in non-funded income from lending activities and service fees, and a 21.1pc rise in earning assets.

“During the quarter, the business showed sustained resilience backed by our proactive approach towards driving income growth, managing liquidity, conservation of capital, and cost containment. Furthermore, a relentless focus on our strategy has enabled us to maintain robust asset growth and deliver a healthy return on our investments. We have effectively demonstrated our combined abilities and competencies in managing and responding to the impact of the healthcare crisis across all our markets,” said KCB Group CEO and MD Joshua Oigara.

Financial Highlights

  • Profit after Tax – Increased by 54.6pc from Sh6.4 billion to KShs. 9.9 billion.
  • Revenue – rose 26.0pc to Sh29 billion.
  • Costs – Up by 16.8pc to Sh12.9 billion from Sh11 .1billion
  • Total assets – increased by 19.4pc to Sh1.2 trillion.
  • Net loans & advances – Up by 18.0pc to Sh704.4 billion through organic and strategic acquisitions.
  • Customer Deposits — Rose by 12.9pc to Sh845.8 billion.

Net interest income grew by 18pc to Sh19.7 billion driven by an increase in net loans and advances coupled with growth in investments in Government securities. This was partially offset by an increase in interest expenses occasioned by tight market liquidity.

Non-funded income (NFI) grew by 47.2pc to Sh9.3 billion. This was driven by additional disbursements during the period which increased lending fees by 73pc. The resumption of economic activities across most sectors led to the growth of our nonbranch transaction numbers which surged by 70pc while branch transactions grew 16pc to drive overall service income up 35pc. The other non-funded income streams were equally strong with FX income growing 46pc, trading income up 82pc, and other income up 16pc. From this performance, the Group was able to register a 32.0pc NFI to total income ratio.

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Provisions decreased by 27.5pc from a similar period last year largely due to a drop in corporate and digital lending impairment charges after COVID-19 related provisions were recognized in the full year 2021. The non-performing book continued to come under pressure due to slow recovery in the construction, hospitality, and part of the manufacturing sectors causing deterioration from 14.8pc to 17.0pc.

The Group’s balance sheet expanded by 19.3pc to Sh1.2 trillion, driven by organic growth across the business and consolidation of BPR.

Customer deposits increased to Sh845.8 billion, registering a 12.9pc growth driven by a proactive deposit mobilization strategy across our markets. These deposits were utilized to fund net loans and advances which went up 18.0pc largely on account of improved corporate and retail lending to close the period at Sh704.4 billion. The Group’s participation in Government securities recorded an increase of 32.6pc from Sh212.5 billion to Sh281.8 billion during the same period.

Shareholders’ funds grew 23.3pc to Sh181.8 billion on improved profitability for the period.

The Group was compliant with all capital requirements. Core capital as a proportion of total risk-weighted assets closed the period at 19.2pc against the Central Bank of Kenya’s statutory minimum of 10.5pc. While the total capital to risk-weighted assets ratio was at 22.8pc against a regulatory minimum of 14.5pc

Scaling Regional Play

KCB launched its new banking subsidiary, BPR Bank Rwanda Plc in May following the amalgamation of KCB Bank Rwanda and Banque Populaire du Rwanda (BPR). The combined Bank is now the second-largest lender in Rwanda and gives KCB Group a stronger edge in deepening the ongoing Group strategy to scale up its regional play.

Outlook

 “We are optimistic about improved business growth in the remaining part of the year as economic fundamentals improve in the East African economy despite global threats and other local developments including the upcoming General Elections in Kenya. Our priority is to harness economic drivers to accelerate the pace of recovery and growth,” said KCB Group Chairman Andrew Wambari Kairu.

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Nigel Jr.
As a tech enthusiast and expert, Nigel Jr. is dedicated to providing in-depth and insightful content on all things technology. With a background in online journalism, product reviewing, and tech creation, Nigel has become a trusted source for all things tech.

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