KCB Gains 7% Growth On Its Share Price In 3 Months At The NSE As It’s Profits Hit Ksh 61.8 Billion

KCB Group PLC has demonstrated remarkable financial performance over the past year, solidifying its position as a leading financial institution in Kenya and the broader East African region.

The bank’s net profit surged by an impressive 64.9%, reaching Ksh 61.8 billion in 2024, up from Ksh 37.5 billion in the previous year.

Key Points; Profits

Q1 2024: Net profit of KSh 16.5 billion, a 69% increase from KSh 9.8 billion in Q1 2023.

H1 2024: Net profit rose by 86% to KSh 29.9 billion compared to the same period in the previous year.

Q3 2024: Profit after tax reached KSh 45.8 billion, marking a 49% growth from KSh 30.7 billion in Q3 2023.

FY 2024: The bank reported a net profit of KSh 61.8 billion, a 64.9% increase from the previous year.

This substantial profit growth can be attributed to several key factors. The bank’s net interest income experienced a 24% increase, driven by improved yields and expanded lending activities.

Additionally, KCB’s regional diversification strategy paid off, with subsidiaries outside Kenya contributing 30.3% to the group’s net profit, underscoring the success of its expansion efforts.

In terms of asset growth, KCB maintained its trajectory, reflecting a robust balance sheet that supports its lending and investment operations. The bank’s deposit base also saw significant growth, indicating increased customer confidence and a strong liquidity position.

However, the bank faced challenges with non-performing loans (NPLs). The loan-loss provisions rose to KSh 17.78 billion from KSh 15.85 billion in the previous year, highlighting the need for enhanced credit risk management strategies. Despite this, the bank’s profitability indicates effective measures to mitigate credit risks.

Read Also: KCB Group and Bank of Kigali launch PAPSS, Enabling Seamless And Affordable Cross-Border Payments Across Africa

Key Points: Non-Performing Loans (NPLs):

Q1 2024: Gross NPLs stood at KSh 205.3 billion, with an NPL ratio of 18.2%

H1 2024: NPLs increased by 16.5% to KSh 212.1 billion.

Q3 2024: Gross NPLs rose by 15.1% to KSh 215.3 billion, resulting in an NPL ratio of 18.5%.

FY 2024: NPLs reached KSh 225.7 billion, with an NPL ratio of 19.2%.

On the Nairobi Securities Exchange (NSE), KCB’s stock performance has been noteworthy. The bank began the year with a share price of KSh 41.60 and has since gained 6.85%, ranking it 31st in year-to-date performance among NSE-listed companies. This upward trend reflects investor confidence in the bank’s financial health and growth prospects.

Trading activity for KCB shares has been robust. Over the past three months, the bank has been the fifth most traded stock on the NSE, with a total volume of 106 million shares exchanged in 8,255 deals, amounting to KSh 4.66 billion. This high liquidity makes KCB an attractive option for investors seeking active participation in the market.

The bank’s commitment to shareholder value is evident in its dividend policy. The board has proposed a final dividend of KSh 1.50 per share, bringing the total payout for the year to KSh 3.00 per share, amounting to KSh 9.6 billion. This consistent dividend payout underscores KCB’s strong earnings capacity and dedication to rewarding its shareholders.

KCB’s digital transformation initiatives have also contributed significantly to its growth. The bank has leveraged digital platforms to enhance customer experience and drive financial inclusion. While specific figures on digital lending were not disclosed, the emphasis on digital channels suggests a strategic focus on technology-driven growth.

Looking ahead, analysts have set a price target of KSh 64.17 for KCB’s stock, with estimates ranging between Ksh 46.25 and Ksh 94.23. This projection reflects optimism about the bank’s future performance, considering its strong financial results and strategic initiatives.

Its important to note that KCB Group PLC’s impressive financial performance, strategic regional expansion, robust stock market presence, and commitment to digital innovation position it as a compelling investment opportunity on the Nairobi Securities Exchange.

Investors seeking exposure to a leading financial institution with a proven track record and promising growth prospects should consider KCB as a key player to watch.

Read Also: KCB Net Profit Up 64.9 Percent, Closes At Ksh 61.8 Billion