KCB Group #ticker:KCB doubled its net profit for the half-year to June on increased income from a balance sheet that crossed the Sh1 trillion mark for the first time.
The Nairobi Securities Exchange-listed firm reported net earnings of Sh15.3 billion for the six months, up 102 percent from Sh7.58 billion earned in a similar period last year as interest and non-interest income grew.
The lender also cut provisioning for loan defaults.
The half-year earnings are equivalent to 79 percent of the Sh19.6 billion the group realised in its full financial year for 2020, placing it on a recovery path from coronavirus-induced economic hardships that had hit profits.
KCB chief executive Joshua Oigara said the group benefited from the ongoing economic recovery, partly supported by relaxed Covid-19 containment measures, vaccination, and new business models.
“The resilient and diversified nature of our business has helped us navigate the unfolding impact of the Covid-19 pandemic,” Mr Oigara said.
“The business is well-positioned to catalyse the ongoing economic recovery as well as benefit from this resurgence.”
KCB’s balance sheet crossed the Sh1 trillion mark for the first time, closing the period at Sh1.022 billion, helped by an 8.4 percent growth in the loan book to Sh606.98 billion.
The group becomes the second Kenyan bank after Equity Group to cross the Sh1 trillion asset mark. Equity closed the review period with a Sh1.12 trillion balance sheet.
KCB hopes to complete the acquisition of two banks in Rwanda and Tanzania at about Sh6 billion, in a deal that looks set to expand its balance sheet.
The two transactions, Mr Oigara said, informed the board’s decision not to recommend interim dividends, since they will be settled in cash.“It [not paying interim dividend] is due to the investments we are going to do. The two are cash transactions and so that is where we are directing resources now,” he said.Pre-Covid, KCB had a tradition of paying an interim dividend of Sh1 per share, totalling Sh3.07 billion, and then following up with a final dividend.Increased lending saw KCB’s net income rise 17.7 percent to Sh36.6 billion. Non-interest income rose by six percent to Sh14.79 billion, despite the continuation of waiver of charges on the bank-to-wallet transfers.KCB’s bottom line was further supported by a nine percent fall in operating expenses from Sh32.21 billion to Sh29.29 billion as the lender cut provisioning for loan defaults.Loan loss provisions fell by Sh4.44 billion or 40.3 percent to Sh6.6 billion. KCB said there […]