KCB Group more than doubled its Net Earnings to KSh 25.2 Billion at the end of the nine months period ending September 2021, an increase of 131% from KSh 10.9 Billion over a similar period last year. This makes KCB Group the second most profitable lender in Kenya.
The lender attributes this strong financial performance to higher income and reduced provisions to cover for non-performing loans as the banking business made an accelerated recovery from the COVID-19 pandemic in the third quarter.
“This is the strongest quarter for us since the COVID-19 pandemic struck in March last year with clear signs of economic recovery across key sectors. While we are cautiously optimistic of the prospects ahead, especially due to the dynamic nature of the healthcare crisis, we project that the worst is behind us,” said Joshua Oigara, KCB Group Managing Director and CEO.
He said KCB had focused on cost management, cash preservation and driving sustainable growth.
“Our resolve to support our customers to navigate the crisis has helped us pick them up from the subdued business environment,” said Oigara.
KCB has its Head Offices in Nairobi Kenya, with Subsidiaries in Burundi, Rwanda, South Sudan, Tanzania and Uganda
KCB Group recorded a 16% rise in total income on account of higher interest income driven by an increase in earning assets and higher non-interest income from fees and commissions, forex trading and lower cost of funding.
The lenders 9% rise in expenses on account of increased staff costs was partially offset by other operating expenses as the Group ring-fenced the business from ravages of pandemic-related effects.
The Group’s balance sheet size grew by 15% to KSh 1.122 Trillion like total loans to customers increased by 125 to KSh 718 Billion due to improved lending in Kenya, Uganda and Rwanda.
During the period, the cost of risk improved to 200 basis points driven by reduced provisions in corporate and digital loans while the ratio of non-performing loans decreased from 15.1% to 13.7%.
Provisions were 53% lower to end of the third quarter at KSh 9.3 Billion from KSh 20 Billion over a similar period last year. The stock of NPL rose marginally to KSh 98.1 Billion from KSh 97 Billion posted in Q3, 2020 mainly from KCB Bank Kenya and partially offset by a reduction in National Bank of Kenya, KCB Rwanda and KCB Bank Tanzania stock.
The Group’s Balance Sheet size increased by 15% to KSh 1.12 Trillion following the acquisition of Banque Populaire du Rwanda(BPR) in Rwanda.
Shareholders Equity grew by 20% from KSh 136 Billion to KSh 163 Billion on improved profitability during the period under review.
Directors of KCB have approved an interim dividend of KSh 1.00 for every ordinary share of KSh 1.00 held. The dividend will be paid on or about Friday, January 14th 2022 to shareholders on the register at the close of business on December 9th, 2021.