KCB Group HY 2016 Pretax Profits up 14%, reschedules rights issue

KCB Half Year 2016 Results

KCB Group has reported a 14% jump in Half year 2016 profits to Ksh 15.1 billion driven by net interest income which rose by 16% from KShs 19.4 Billion to KShs 22.5Billion.

Major Highlights

  • Net Loans and Advances grew by 8% from KShs. 321 Billion to KShs 347 Billion.
  • Customer deposits declined 2% to KSh 433Billion from KSh  443Billion, the lender blaming the devaluation of the South Sudan currency.
  • Total expenses were up by 6% as cost to income ratio declined from 48.6% to 47.9%.
  • The Group’s Non Performing Loans (NPLs) grew by 36%.
  • Net Provisions for Bad Debts shot up by 54% from KShs 1.3Billion to KShs 2 Billion.
  • Total Assets declined by 1% to KSh 560Billion from Kshs. 567 Billion.
  • KCB Mpesa, in which KCB has partnered with Safaricomnow has over Kshs.11.3 billion in loans disbursed since the launch in March 2015 and with about 6.5 Million customers.

On Chase Bank

KCB Group was in April appointed the statutory Manager manager of troubled Chase Bank Limited (in receivership) by the Kenya Deposit Insurance Corporation (KDIC), with the endorsement of the Central Bank of Kenya (CBK). KCB’s role was to reopen and stabilise the Bank.

KCB says Chase has now entered a crucial phase that will determine the future ownership and funding.KCB will exit Chase by the end of September with the Central Bank of Kenya expected to pick a new investor to buy a majority stake in Chase Bank as from by then.

On Rights Issue

KCB has also called off its planned Ksh 10 Billion rights issue citing a strong projected cash flow for the full year.

Share Price;

KCB’s share price is down by over 28% percent this year and closed at Ksh 31.50 on Thursday.