East Africa’s largest bank by assets, KCB Group, expects its full year profit to drop by more than 25% compared to last year’s full year profit due to the adverse effects of covid19 pandemic. It is the first time in nearly two decades that the company is issuing a profit alert.
In an interview with the Business Daily, KCB Group CEO Joshua Oigara said that it is unlikely that the bank will recover in the last quarter of 2020, after posting a 43% drop in net profit in the nine months through September.
“We don’t anticipate a change. That is quite normal given the crisis we see today. That (profit warning) is an issue we are discussing with the Capital Markets Authority (CMA),” Mr Oigara told the Business Daily.
KCB Group has been one of the top-performing listed companies in Kenya, consistently posting strong profit growth year after year. However, the Covid19 pandemic has significantly affected its business, leading to a big jump in the provisions for loan losses to KSh 20 billion in the third quarter of 2020 from KSh 5.8 billion in the same period last year.
Most Kenyan banks including Equity Bank, I&M Bank, and DTB have posted significant decline in their net profit ever since the covid19 pandemic set foot in Kenya.