Nairobi — Kenya Commercial Bank has registered a 40 percent decline in its half-year after-tax profits to Sh7.6 billion.
The lender in a statement attributed the drop-in performance from Sh12.7 billion it posted in 2019 to increased provisions in the wake of higher credit risk due to the COVID-19 pandemic.
"The second quarter was the toughest in our recent history as the pandemic hurt economic activity across markets. Most of the key sectors were nearly shut down and our customers continue to face unprecedented challenges," said KCB Group CEO and MD Joshua Oigara.
He added that the group committed to cushion its customers and other stakeholders after the pandemic shook the country’s economy from March
"When the virus hit home in March, we made a commitment to look after our customers, staff and other stakeholders while pursuing business continuity. We intend to keep on this promise even under the current worsening operating environment," said Oigara.
The bank further reveals that it had restructured loan facilities worth Sh101 billion to cushion customers against the effects of the crisis.
Central Bank of Kenya announced that at least Sh844.4 billion of loans in the wider banking sector were restructured by end of June, to cushion borrowers from adverse effects of COVID-19.
The Group set aside Sh11 billion as provision expense for potential loan losses that could crystalize as a result of the coronavirus pandemic, compared to Sh3billion provision during a similar period last year.
In the period under review, the bank’s total operating income was up 17 per cent to Sh45.0 billion compared to Sh38.6 billion in June 2019.
Its total operating expenses were up 20 per cent on the back of the NBK acquisition.
The lender’s net interest income was up 22 per cent to Sh31.1 billion from Sh25.4 billion pegged on additional investments in government securities and lending.KCB also saw its non-funded income surging by six per cent to Sh14.0 billion from Sh13.2 billion, driven largely by revenues from the digital proposition, growth in the forex income and additional income from National Bank of Kenya, the newest subsidiary of KCB Group.KCB will not pay an interim dividend to its shareholders this year as a precaution.