KCB Group, the biggest bank in East and Central Africa by assets, closed FY2025 with profit after tax of KSh 68.35 Billion, up 10.6% from KSh 61.77 Billion and the highest in the bank's history.
- •Total interest income fell 1.7% to KSh 209.73 Bn as lending rates declined across KCB's seven markets, while total operating income rose just 4.3% to KSh 213.78 Bn.
- •The profit expansion came entirely from the liability side: interest expense collapsed 18.9% to 61.70 Bn, compressing the cost of funds from 4.5% to 3.8% and lifting net interest income 7.8% to 148.02 Bn, while net interest margin widened to 7.7%.
- • Central Bank of Kenya data shows industry pre-tax profit surpassed KSh 300 Bn for the first time in 2025, with KCB Kenya contributed KSh 63.69 Bn of that amount.
The full-year dividend of KSh 7.00 per share is up 133.3% from KSh 3.00 in FY2024, representing a total payout of KSh 22.50 Bn, the largest in the bank's history. The proposed final dividend of KSh 3.00 is payable on or about 22 May 2026 to shareholders on the register at close of business on 2 April 2026, subject to shareholder approval.
The engine was deposit structure. Demand deposits, which reprice immediately as rates fall, account for 61% of KCB's 1.59 trillion deposit book. As the Central Bank Rate was cut 250 basis points during 2025, KCB's funding costs adjusted faster than peers, giving the bank a structural advantage its competitors did not share.
Absa Kenya and Stanbic Holdings, the two banks that reported before KCB this season, both saw net interest income decline. Absa recorded a 6% drop to 43.30 Bn as falling rates compressed lending margins faster than its cost of funds adjusted. Stanbic's full-year profit was flat at 13.72 Bn. Both banks cushioned earnings through lower provisions: Absa cut impairment charges 32% to 6.20 Bn. KCB moved in the opposite direction. Loan loss provisions rose 8.2% to 32.42 Bn, making it the only one of the three to simultaneously absorb a decline in total interest income and a rise in credit costs.
Asset Quality and the Loan Book
The gross NPL ratio closed at 16.9%, down from 19.2% in FY2024 but still above KCB's own guidance of 14% to 16%. Gross NPLs fell KSh 13.90 Bn to KSh 211.80 Bn, the first meaningful reduction in four years, aided by recoveries and the removal of National Bank of Kenya's loan book following its May 2025 sale to Access Bank. NPL coverage improved to 113.2% from 92.3%.
Net loans crossed KSh 1 trillion for the first time, closing at KSh 1,151.58 Bn, more than double the KSh 539.75 Bn of 2019. Customer deposits grew 15.2% to KSh 1,592.61 Bn. Total assets of KSh 2,147.21 Bn are the second highest on record. Shareholders' equity rose 20.6% to KSh 331.47 Bn, outpacing profit growth, which is why return on equity declined to 22.5% from 24.6% despite record earnings.
The cost-to-income ratio improved to 42.3% from 45.4%. The improvement is partly structural: the NBK divestiture removed a cost-heavy subsidiary from the consolidated numbers. Cost of risk remained elevated at 2.8%, above the 2.2% to 2.4% guidance range.
The Non-Funded Income Gap
Non-funded income fell 2.6% to KSh 65.76 Bn, missing the 33% to 34% guidance range at 30.7% of total income. Foreign exchange income dropped 35% to KSh 11.40 Bn on thin margins, low volumes, and conflict-related branch closures at Trust Merchant Bank in eastern DRC, where group profit fell 18%.
The completed acquisition of Riverbank Solutions and the pending Pesapal stake are positioned to address this gap. Mobile loan disbursements grew 30% to KSh 544.00 Bn, with 99% of transactions now processed through non-branch channels.
For FY2026, KCB guides for loan growth of 10% to 11%, NIMs of 7.2% to 7.8%, and an NPL ratio of 14% to 16%. Return on equity guidance of 20% to 22% is set below the FY2025 actual of 22.5%, a deliberate signal that equity will continue compounding faster than earnings in the near term. The share price rose 58% in 2025 to KSh 65.75, with total shareholder returns including dividends at 75%.
