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KCB Group Net Profits Drop By 8% To Ksh 37.5 Billion

BY Juma · March 21, 2024 07:03 am

Of the commercial banks that have released their financial results so far, KCB Group has become the first one to report a drop in their profits, blaming it on high costs.

The bank’s net profit dropped by 8 percent to 37.5 billion shillings in the full year ending December 2023 compared to a similar period in the preceding year.

KCB attributed the 8 percent drop to increased costs and shilling depreciation. This represents a fall of 3.3 billion shillings from 40.8 billion shillings registered in 2022.

The consolidation of the DRC’s Trust Merchant Bank (TMB) subsidiary, voluntary retirement, and litigation fees pushed the cost to 83.2 billion shillings from 59.4 billion shillings.

“Provisions increased by 154.7 percent from the downgraded facilities in Kenya and additional provisions on foreign currency facilities from the depreciating Kenya Shilling against hard currencies,” said KCB in a statement during the release of the results.

The group’s total assets hit 2.17 trillion shillings, representing a 40 percent jump, boosted by a growth in customer deposits. Earnings expanded to 165.2 billion shillings, buoyed by an increase in funded income from earning assets and non-funded income, which grew by 33.9 percent.

Net interest income also increased by 23.9 percent, withstanding the high cost of funds in the market.

“We had a fairly good run in the 12 months in the wake of difficult economic times, with most of the business lines achieving strong organic growth. We have extended a helping hand to our customers through our loan book to support them to navigate and accomplish their ambitions,” the group’s Chief Executive Officer, Paul Russo, said.

KCB Group is expected to cash in from the sale of National Bank Kenya to Access Bank. Already both KCB and Access Bank have confirmed that the deal to buy and acquire National Bank has been finalized.

About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it. (020) 528 0222 or Email: info@sokodirectory.com

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