KCB Group’s gross bad debt grew in the first quarter of this year to KSh98 billion, the highest level ever recorded by the bank, from KSh66.2 billion in the first quarter of 2020. The lender’s ratio of gross non-performing loans to gross loans stood at 14.8%, above the banking sector’s average of 14.2%.
The largest share of the bank’s loans were personal loans, taking up 38.5% of the entire loan book while loans to the real estate sector and manufacturing came in second and third respectively, taking up 18.5% and 14.3% of the loan book.
KCB Group restructured loans worth KSh102.5 billion at the end of Q1 2021. The restructured debt included 4,197 personal loans worth KSh13.5 billion, 937 real estate loans worth KSh29.6 billion, 225 loans to the tourism and hospitality sector worth KSh16.9 billion and 307 loans to the manufacturing sector worth KSh13.5 billion.
The bank’s Q1 net profit rose to KSh6.376 billion at the end of 31st March 2021, a 2% increase from 6.262 billion in the corresponding period a year ago.
Its closest rival, Equity Group, posted a 63% jump in net profit in the period under review to KSh8.6 billion.
Joshua Oigara, KCB Group CEO, said that the bank’s subsidiaries in Tanzania, Uganda, South Sudan, Rwanda, and Burundi posted improved results this year and contributed to 17% of the lender’s net profit in the first quarter.
KCB Group reported a 9% improvement in total interest income, the interest paid on loans. The interest income rose to KSh21.97 billion at the end of the first quarter, from KSh20.21 billion in the same quarter last year, as a result of increased lending.
The bank’s income from fees and commissions on loans and advances decreased drastically to KSh1.5 billion from KSh2.8 billion in March 2020. Subsequently, non-funded income fell by 20% to KSh6.31 billion in the three months through March 2021, compared to KSh7.90 billion in the same period a year ago.