KCB Group PLC has reported a Ksh. 45.8 billion in profit after tax for the first nine months of the year, representing a 49% growth from the Ksh. 30.7 billion posted a similar period last year.
In the previous Financial Year, Deposits increased to Ksh1.7 trillion from Ksh922 billion in Quarter 3 2022 pushing up the balance sheet past the Ksh2 trillion mark to Ksh2.1 trillion, a record high for the region.
The lender said, this was driven by organic growth in demand and term deposits in the existing business and the consolidation of the group’s DRC subsidiary Trust Merchant Bank (TMB) which was acquired in December 2022.
In the Current Financial Year, Revenue grew by 22% to KSh 142.9 billion, supported by gains from subsidiaries. Subsidiaries (excluding KCB Bank Kenya) contributed 36.6% of profits after tax and accounted for 34% of total assets, underscoring the benefits of market diversification beyond Kenya.
The contribution by subsidiaries (excluding KCB Bank Kenya) improved during the period, closing at 36.6% in profit after tax and 34% in total assets, a demonstration of the continued benefits of diversification to other markets outside Kenya.
Funded income grew by 24%, buoyed by higher yields and lending to key sectors. Non-funded income was boosted by foreign exchange gains, transaction fees, and strong contributions from Trust Merchant Bank (TMB), the Group’s Democratic Republic of Congo subsidiary.
The Lender's Operating costs increased by 11%, attributed to higher staff and technology expenses, alongside prudent provisioning for non-performing loans (NPLs), which stood at KSh 215.3 billion. The NPL ratio closed at 18.5%, reflecting tough economic conditions across sectors.
KCB Group’s total assets rose to KSh 2.0 trillion, driven by customer deposits of KSh 1.5 trillion. Net loans and advances increased to KSh 1.1 trillion, supported by retail lending growth.
“The operating environment has been tough across all our markets, but we have continued to walk the journey with our customers while ensuring our key fundamentals remain strong. We are optimistic of a strong end of the year, riding on improving market conditions, solutioning for customers and tapping the great strength of our people,” said KCB Group CEO Paul Russo, while releasing the results on Wednesday.
KCB continued to top in global, regional and local accolades, cementing its market leadership position. The lender, surpassed Equity Bank Group's profit.
Equity Group Holdings recently reported a 13% increase in earnings after tax to KSh 40.9 billion in quarter three of 2024, up from KSh 36.2 billion during a similar period last year.
Deposits increased by 9% to KSh 1.3 trillion, up from KSh 1.2 trillion, and earnings per share increased by 13% to KSh 10.40, up from KSh 9.20.
"We are optimistic that the strong liquidity of the Group has positioned us to effectively support our customers as the economy starts showing signs of improvement in the key markets we operate in, signaled by reduction of the Central Bank Reference rates in some of the countries where we operate," Equity Group MD James Mwangi stated.
Regional businesses contributed 51% of earnings before tax and 48% of total assets, reaching KSh 1.7 trillion.
Earlier in August, KCB Group announced an increase in its half-year net profit, rising 87 percent to Ksh 29.1 billion. This performance led the bank to reinstate dividend payments, proposing a payout of Ksh 1.5 per share for the period ended June 2024.
The bank's growth was driven by higher interest and non-interest income.
Net interest income increased by 34.8 percent to Ksh 61.33 billion, while non-interest income rose 52.3 percent to Ksh 33.2 billion.
The loan book expanded to Ksh 1.032 trillion, contributing to the overall growth.
KCB's main subsidiary, KCB Bank Kenya, saw its half-year net profit grow by 52.3 percent to Sh21.22 billion. The group's total assets increased to Ksh 1.976 trillion, approaching the Ksh 2 trillion mark.
Despite these positive results, the bank still faces challenges with non-performing loans. The NPL ratio rose to 18.5 percent, with gross NPLs increasing to Ksh 212.1 billion. KCB attributed this to downgrades in Kenya and the impact of foreign currency denominated loans.
Funded income grew by 24%, buoyed by higher yields and lending to key sectors. Non-funded income was boosted by foreign exchange gains, transaction fees, and strong contributions from Trust Merchant Bank (TMB), the Group’s Democratic Republic of Congo subsidiary.