Kenya Commercial Bank Group (KCB) has reported a profit of Ksh. 12.7 Billion for the first six months of the year. This represents a 5% increase as compared to a similar period last year.
The rise in profitability was driven by a 5% increase in interest income to Ksh. 25.4 Billion, non-funded income grew 15% to Ksh. 13.2 Billion. Growth in interest income was largely driven by a 13.8 per cent growth in loan book, pushing up interest on loans and advances to customers to Ksh. 479 billion up from Ksh. 421 billion. Retail loans grew at 12% while corporate and mortgage grew at 10% and 5% respectively.
Growth of alternate channels also had a positive contribution towards profitability. Channel transactions done outside the branch increased to 96% of total transactions, up from 87% in 2018 driven by mobile channel.
The bank’s costs were impacted by a 266% jump in loan loss provision from Ksh. 0.8 billion to Ksh. 3 billion. The rise was explained as a result of absence of the one off benefit of passing non performing loans through balance sheet as was last year during transitioning to new accounting standard.
KCB Group CEO and MD Joshua Oigara, had this to say, “We had a strong second quarter and witnessed continued growth across our businesses segments. The investment in technology generated positive return and further helped drive efficiency and deepen access to affordable financial services in all markets,”
The board has approved payment of an interim dividend of Sh1.00 per share. This will be paid in November 2019.