KCB Group Makes Ksh 9.9 Billion In Profits In 3 Months

KCB Group PLC’s profit after tax surged 54.6 percent to 9.9 billion shillings in the three months ending March 2022. This rise from 6.4 billion shillings in a similar period last year was boosted by growth in total income and a reduction in loan loss provision.

Revenues increased by 26.0 percent to 29.0 billion shillings on account of an increase in interest income, an increase in non-funded income from lending activities and service fees, and a 21.1 percent 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,” said KCB Group CEO and MD Joshua Oigara.

Net interest income grew by 18 percent to 19.7 billion shillings driven by an increase in net loans and advances coupled with growth in investments in Government securities.

Non-funded income (NFI) grew by 47.2 percent to 9.3 billion shillings. This was driven by additional disbursements during the period which increased lending fees by 73 percent.

The resumption of economic activities across most sectors led to the growth of our non-branch transaction numbers which surged by 70 percent while branch transactions grew 16 percent to drive overall service income up 35 percent.

The other non-funded income streams were equally strong with FX income growing 46 percent, trading income up 82 percent, and other income up 16 percent. From this performance, the Group was able to register a 32.0 percent NFI to total income ratio.

Provisions decreased by 27.5 percent 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 14.8 percent to 17.0 percent.

The Group’s balance sheet expanded by 19.3 percent to 1.2 trillion shillings, driven by organic growth across the business and the consolidation of BPR.

Customer deposits increased to 845.8 billion shillings, registering a 12.9 percent growth driven by a proactive deposit mobilization strategy across our markets.

These deposits were utilized to fund net loans and advances which went up 18.0 percent largely on account of improved corporate and retail lending to close the period at 704.4 billion shillings.

The Group’s participation in Government securities recorded an increase of 32.6 percent from 212.5 billion shillings to 281.8 billion shillings during the same period. Shareholders’ funds grew 23.3 percent to 181.8 billion shillings 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 19.2 percent against the Central Bank of Kenya’s statutory minimum of 10.5 percent. While the total capital to risk-weighted assets ratio was at 22.8 percent against a regulatory minimum of 14.5 percent.