KCB Group has posted a Ksh. 30.7 billion in net profit for the nine months ending 30th September 2023 which rose from Ksh. 30.5 Billion in Q3 2022.

The rise in profitability was on the back of a 38.7%  rise in non-funded income to KShs. 30.6 from KShs. 42.4 billion due to enhanced investments in digital capabilities. Funded income was up 21.6% to KShs. 74.9 billion from KShs. 61.6 billion on loans and Government securities growth which more than offset the growth in interest expense from increased cost of funding.

The contribution of Group businesses (excluding KCB Bank Kenya) to the overall profitability was up to 27.9% from 16.4% as investments in regional businesses continue to pay off. Profit before tax from the Group businesses stood at KShs. 11.3 billion from KShs 7.1 billion in the previous year. The contribution to total assets improved to close the period at 32.2%.

On the other hand, total costs closed at KShs. 60.8 billion during the period, mainly contributed by legacy legal claims at NBK, staff restructuring expenses and TMB consolidation. While loan provisions increased by
118.1% on additional cover taken up in Kenya impacted by depreciation of Kenya Shilling on foreign currency denominated loans.

At the same time, KCB became the first Bank in the region to surpass the two trillion shillings mark in asset size, with assets worth KShs. 2.1 trillion as at the end of September.

Customer Deposits increased by 79.6% to KShs.1.7 trillion from KShs.922.3 billion. Net loans and advances crossed the one trillion-shilling mark for the first time, with the loan book closing the period at KShs. 1.05 trillion, up from KShs.758.8 billion on TMB consolidation and organic growth in existing markets.

The ratio of non-performing loans (NPLs) improved to 16.4%, down from 18.2%, as the Group enhanced its efforts to improve asset quality. The stock of NPLs closed the period at KShs.187 billion.

KCB Group CEO Paul Russo, said, “We have had a rather difficult nine months due to a tough operating environment that has negatively affected our customers. Our performance was borne out of diligent implementation of our strategy, which saw us close the 16% gap in PBT from Quarter 2 performance. Our focus has been on speedy and sustainable resolution of our customers’ pain points and ringfencing the business to guarantee long-term growth. It is upon this premise that we continuously innovated and delivered products with leading value propositions, in line with our resolve on opening doors of opportunities for all. With a solid and well diversified balance sheet, we are on track to meet our full year ambitions going by the improved performance in the third quarter, supported by resilient business segments and subsidiaries. We have been made great strides investing in modernizing both our hardware and application infrastructure to improve capacity and systems capability.”