KCB Group CEO and MD Joshua Oigara interact with KCB Group Chairman Andrew Wambari Kairu and KCB Group Chief Finance Officer Lawrence Kimathi during the KCB Group half-year financial results announcement. KCB Bank recorded a growth of 131 per cent in net profits to Sh25.2 billion in the first nine months of 2021, following a significant reduction in bad loans.
The lender said in a statement yesterday that it made a profit-after-tax of Sh10.9 billion in the third quarter of last year, a period in which the economy was under the grip of the Covid-19 pandemic, with Group Chief Executive Joshua Oigara describing it as a "year of survival."
Following the good earnings, KCB directors have approved an interim dividend of Sh1 for every ordinary share, which translates into a total payout of Sh2.47 billion. READ MORE
Also yesterday, KCB subsidiary National Bank of Kenya reported Sh1.1 billion in profit after tax for the nine months ending September, representing a 1,126 per cent increase from Sh87 million in a similar period last year.
This was driven by increased income from loan interest and foreign exchange trading, coupled with lower loan loss provisions and benefit from change in corporation tax rate to 30 per cent.
KCB narrowed the profit gap between it and Equity Bank, with the latter having announced a net profit of Sh26.3 billion in the same period.
The race to the pinnacle of Kenya’s financial sector has intensified with both lenders’ assets surpassing the Sh1 trillion mark, a feat only the two have managed in the region.
KCB’s growth in profits was largely on account of a reduction in loan loss provision–or money that banks set aside as insurance against possible defaults–reflecting economic recovery and aggressive credit recovery efforts by the listed lender.
In the statement, the bank said it slashed its stock of non-performing loans in digital and corporate loans.
At the height of the pandemic last year, the bank was forced to stop lending on its digital lending platform, KCB M-Pesa, due to high defaults.
However, as normalcy returned and banks were allowed to list defaulters with credit reference bureaus, lending on the platform was resumed.Financial results released last week by telco Safaricom showed that in six months to September, disbursements on KCB M-Pesa declined by 17.9 per cent to Sh22.9 billion.“This is the strongest quarter for us since the Covid-19 pandemic struck 20 months ago , with clear signs of economic recovery across […]