KCB Group has reported a 20% decline in the net profit to Ksh. Sh16.1 Billion for the half year 2023. This is as compared to Sh19.5 billion posted in a similar period last year.
The decline in profitability was on the back of a 60% rise in operating expenses to Sh50.61 billion up from Ksh. 31.6 Billion in 2022. This was due to a 136% rise in the loan loss provision to Ksh. 10.1 Billion. Staff costs also rose to Ksh. 17.4 Billion representing a 23% increase.
On the other hand, net interest income grew 12.1 percent to Sh45.5 billion as the loan book expanded by 32.3 percent to Sh964 billion. Non-interest income was up 30.3 percent to Sh27.56 billion, adding to the growth in the total revenue.
Paul Russo, KCB Group CEO, said, “Despite a challenging economic environment across our operating markets, the business remained resilient delivering a strong balance sheet and increased contribution from regional businesses. Profitability was under pressure in the first half from increased funding costs on higher market deposits rates, prudent provisioning on legacy credit facilities, and provisions for legacy legal claims at NBK. Looking ahead, noting the actions we have taken and with significantly improved liquidity, business focus is on accelerated performance in the second half of the year while supporting the distressed customers.”