KCB Group Profit After Tax Up By 131 Percent

KCB Group Plc more than doubled its profit after tax for the nine months ending September 2021, placing it among the best performing banks in terms of profits despite the ongoing Covid-19 pandemic.

Net profit stood at 25.2 billion shillings from 10.9 billion shillings a year ago, a 131 percent jump, driven by higher income and reduced provisions as recovery from the COVID-19 pandemic accelerated in quarter three.

“This is the strongest quarter for us since the COVID-19 pandemic struck 20 months ago, with clear signs of economic recovery across key sectors.

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,” said KCB Group CEO & MD Joshua Oigara.

The Group recorded a 16 percent rise in total income to 79.9 billion shillings, on account of higher interest income—driven by an increase in earning assets—, higher non-interest income – driven by increased transactional volumes and FX income and lower cost of funding.

At 34.7 billion shillings during the period, expenses rose by 9 percent on account of increased staff costs partially offset by a decrease in other 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 bps driven by reduced provisions in corporate and digital loans, while the ratio of non-performing loans (NPL) decreased from 15.1 to 13.7 percent.

Provisions were 53 percent lower to end the period at 9.3 billion shillings from 20 billion shillings a similar period last year.

The stock of NPL rose marginally to 98.1 billion shillings from 97 billion shillings 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 percent to 1.12 trillion shillings, driven by organic growth across our businesses and the acquisition of Banque Populaire du Rwanda (BPR) in Rwanda.

Customer deposits stood at 859 billion shillings, an 11 percent jump largely due to organic growth in Kenya while gross loans rose 12 percent to 718 billion shillings on account of improved lending in Kenya, Uganda, and Rwanda.

Shareholders’ equity grew 20 percent from 136 billion shillings to 163 billion shillings on improved profit for the period.