KCB Group PLC has announced that it recorded profit after tax of Ksh. 29.9 billion for the first half year ending June 2024. This is a 86% increase from the Ksh. 16 billion the company registered in a similar period in 2023.
The balance sheet for the company expanded by 6% to Ksh. 1.98 trillion, up from Ksh.1.86 trillion in 2023. This was on the back of customer deposits growth which closed the period at Ksh. 1.49 trillion.
The contribution by subsidiaries (excluding KCB Bank Kenya) has increased closing the half at 37.8% in pretax profits and 34.4% in total assets.
Group Chief Executive Officer Paul Russo had this to say about the results “We delivered a commendable first half of the year, despite strong headwinds in the operating environment, especially in Kenya, thanks to the goodwill and confidence from our customers and commitment by our staff. We were intentional in working with our customers and stakeholders to support them in navigating the difficult environment. Looking ahead, we see a stronger second half, leveraging on our Transforming Today Together strategy and the expected economic turnaround in the markets we operate in. We are confident that this strategy will give fresh impetus to our business, as we focus on cost optimization.”
Net Loans & Advances grew by 7% to Ksh.1.03 trillion while revenue rose across both funded and non-funded income lines. Net interest income grew by 35% while non-funded income grew by 21%, driven by digital banking and FX trading income as well as enhanced contribution from Trust Merchant Bank (TMB), their DRC-based subsidiary.
Provisions increased by 20%, impacted by non-performing loan downgrades cushioned by the impact of the appreciation of the Kenya Shilling relative to the foreign denominated facilities. The bank’s gross non-performing book stood at Ksh. 212 billion, which saw the NPL ratio close the quarter at 18.5%. To mitigate the effect of increased NPLs, provisions increased by 20%.
Costs increased by 9.6% due to growth in business volumes, staff costs and inflationary pressures, to close the period at Ksh. 44.3 billion. Cost to income ratio was down to 46.8% from 55.3% on the back of strong income growth coupled with stringent cost management initiatives.
Group Chairman Joseph Kinyua added “KCB Group demonstrated remarkable strength and adaptability amid global and local challenges, by delivering good asset growth and improved capital adequacy ratios,” said KCB Group Chairman Dr. Joseph Kinyua. “This performance has enabled the Board to recommend an interim dividend of Ksh. 1.50 per share.”
Latest corporate developments for the company during the period included the deal for the sale of NBK. In March, KCB Group PLC and Access Bank PLC signed a binding offer for the proposed acquisition 100% of the issued and outstanding share capital of National Bank of Kenya Limited (NBK) by the latter. The successful completion of the transaction is subject to conditions that are customary for transactions of this nature including receipt of all regulatory approvals. KCB acquired 100% of NBK in 2019.
The board of KCB Group PLC has recommended an interim dividend amounting to Ksh. 4.8 Billion, the biggest interim dividend in the company’s history. The interim dividend will be Ksh. 1.50 per share.