KCB chief executive Joshua Oigara on March 2. Photo/Enos Teche. KCB Group Plc shook off the effects of the ongoing Covid-19 pandemic to post a net profit of Sh6.4 billion in the first three months of the year to March.
The two per cent increase in profitability from Sh6.3 billion a year earlier was on the back of cost-saving initiatives and an increase in net interest income.
According to KCB Group MD Joshua Oigara, the economic environment marginally improved in the quarter although the uncertainties from the pandemic remain a big risk to the outlook.
The focus was on conserving cash, supporting customers navigate the crisis and implementing our strategic focus areas which are anchored on digital banking and excellence in customer experience,” Oigara said.
He added that revenues have remained flat with the costs declining marginally.
”Overall performance was largely impacted by lower non-interest income due to subdued digital lending on reduced disbursements and lower customer transactions” Oigara said.
Net interest income grew by 11 per cent to close the quarter at Sh16.7 billion driven by a rise in interest-earning assets and effective management of cost of funding during the period.
This growth was offset by a 20 per cent decline in non-funded income due to a slowdown in the digital lending and service fee waivers in Kenya to cushion customers from the pandemic. As a result, total income stood at Sh23 billion.
The cost of risk went down slightly although loan provision remained at Sh2.9 billion in the quarter due to an increase in loan balances.
The stock of Non-performing loans (NPLs) rose to Sh98 billion up from Sh66.2 billion in 2020 while NPL ratio rose to 14.8 per cent from 11.1 per cent last year mainly on the back of Covid-19 related downgrades.
The Group’s balance sheet stood at Sh977.5 billion in the quarter, up from Sh947.1 billion the previous year.Customer loans were up 7.8 per cent to Sh597.1 billion on account of additional lending during the period while customer deposits increased marginally by 1.2per cent to Sh749 billion.Shareholders’ equity grew 8.8 per cent from Sh135.5 billion to Sh147.5 billion on improved profit for the period.The Group’s capital headroom remained strong with its ratios well above the minimum regulatory requirement. The total capital for the Group stood at Sh172.6 billion, representing a total capital to risk-weighted assets ratio of 21.8 per cent against a regulatory minimum of 14.5per cent.The Group’s core capital as a proportion of […]