KCB Group has announced that it has recorded Ksh. 40.8 billion in profit after tax for the full financial year ending December 2022. This represents a 19.5% rise in profit after tax from Ksh. 34.2 billion that the bank reported in 2021.
The profit before tax contribution of other subsidiaries excluding KCB Bank Kenya increased to 17.0% (up from 13.9% in 2021), riding on organic growth and increased scale in the businesses.
Commenting on the results, KCB Group CEO Paul Russo said “The strong performance for the year was as a result of our business strategy that is anchored on customer obsession, sharper execution, and a productive organisation culture. The business benefited from a vibrant core banking business, growth of new business lines and accelerated digital transformation to post this record performance”, said Mr. Russo.
“Overall, we have positive momentum, and we shall build on this and ensure that we make significant step change in culture and performance, across all our business units. Despite a challenging operating environment, the belief in our people, enhanced digital capabilities, impetus in our regional businesses and successful integration of Trust Merchant Bank (TMB), our latest subsidiary in the Democratic Republic of Congo, makes a good case for better performance” he added.
Revenues for the banking group increased by 19.6% to Ksh. 129.9 billion, driven by net interest income which grew by 11.5%. This was supported by earning assets and partially offset by increase in interest expenses from higher costs of borrowing and interbank market rates. Non-funded income grew 39.8% largely from trade finance income, lending fees and commissions.
Costs were up 24.1% compared to last year on account of increased business activities and impact of BPR and TMB acquisitions. Provisions increased marginally by 1.7% compared to the previous year.
The ratio of non-performing loans (NPL) stood at 17.3%, largely driven by downgrades from the KCB Kenya business. Gross NPLs stood at Ksh. 161.2 billion.
Total assets increased by 36.4% to stand at Ksh. 1.55 trillion. This was driven by loans and investment in government securities and funded by growth in customer deposits and additional borrowings. Customer loans increased by 27.8% to Ksh. 863 billion from additional lending in the Kenya business, increased lending in the international businesses and the acquisition of TMB. Customer deposits increased by 35.6% to Ksh.1.135 trillion, mainly from TMB and organic growth in the existing businesses.
Shareholders’ funds also grew by 18.9% to Ksh.206.3 billion from Ksh.173.5 billion on improved and accumulated profits for the year to date.
The KCB Group board of directors has proposed a final dividend payout of Ksh. 1.00 per share, subject to shareholder approval. This is in addition to an interim payout of Ksh. 1.00 per share which was paid out in January 2023. This brings the total dividend payout for the year to Ksh. 6.4 billion.