KCB Group full year profit hits Ksh.34 billion on higher income

KCB Group has posted a 74 per cent growth in net profit for the year ended in December 2021 to Ksh.34.1 billion from Ksh.19.6 billion a year prior.

The rise in the lender’s profitability is anchored on rising operating income in the period with total operating income expanding by 13.5 per cent to Ksh.108.6 billion from Ksh.95.7 billion.

The income growth has been supported by a 15.1 per cent rise in net interest income to Ksh.77.7 billion from Ksh.67.5 billion in December 2020.

At the same time, the bank’s non-interest funded income (NFI) has improved by 9.6 per cent to Ksh.30.9 billion from Ksh.28.2 billion pointing to the lender’s gains from the digitisation of services.

KCB’s operating income has grown ahead of overall costs which were up by 11.9 per cent to Ksh.47.8 billion on higher staff and organisational expenses.

The rise in costs has been partly offset by a 52 per cent trim in loan-loss provisioning costs to Ksh.13 billion from Ksh.27.2 billion.

“We made significant progress in achieving our 2021 strategic targets which delivered a strong financial performance that was in line with gradual economic recovery across all markets. The third and fourth quarters were the turning point with a pick-up in lending activity even as the COVID-19 pandemic continued to impact on economic activity” said KCB Group Managing Director Joshua Oigara.

“During the period, we deliberately focused on supporting customers to weather the healthcare storm. We expect good business momentum this year with a projected economic recovery across markets”.

KCB Group’s level of gross non-performing loans (NPLs) has nevertheless soared by 27.2 per cent to Ksh.122.9 billion from Ksh.96.6 billion leaving the bank ratio of NPLs at 16.5 per cent, 3.4 percentage points above the industry’s average NPL ratio of 13.1 per cent at the end of December 2021.

Mr. Oigara expects the bank’s continued focus on enhancing customer experiences and on lending to small and medium enterprises (SMEs) to continue providing momentum for the bank in 2022.

In 2021, KCB Group grew its SME loan book by 48 per cent to Ksh.88.9 billion from Ksh.60 billion and expects to grow the portfolio again by 50 per cent this year.

KCB Group's asset base now stands at Ksh.1.14 trillion following its addition of the Popular Bank of Rwanda (BPR) in a transaction that closed on July 31.

The lender is set to fully amalgamate the new acquisition into its Group operations by the end of June this year by adding it to its KCB Bank Rwanda subsidiary creating a single banking business in the market.

Subsequent to the profit rise, the board of directors of KCB Group have recommended the payment of the final dividend per share at Ksh.2 taking the bank’s total payout in the year to Ksh.3. 

The proposed dividends round off to a combined payment of  Ksh.9.6 billion to shareholders.

KCB earnings per share in the period have improved to Ksh.10.64 from Ksh.6.10.