KCB Bank reported a profit of KSh 29.9 billion for the first half of 2024, reflecting an 86% rise from the KSh 16.1 billion recorded during the first six months of 2023. This growth occurred despite a difficult economic environment marked by nationwide protests by Gen Z, a weakening shilling, and widespread flooding.
“We delivered a commendable first half of the year, despite strong headwinds in the operating environment, especially in Kenya, thanks to the goodwill and confidence from our customers and commitment by our staff,” said Paul Russo, KCB’s chief executive.
The bank’s profitability was driven by a notable increase in interest income, which surged by 38.9% to KSh 97.4 billion. Additionally, non-interest income saw a 20.8% rise, amounting to KSh 33.3 billion. These elements combined to boost total operating income to KSh 94.6 billion, underscoring KCB’s strong performance during the period.
The bank’s loan portfolio grew by 7% to KSh 1.03 trillion, marking a decade of consistent growth in KCB’s lending activities, reinforcing its robust market position. However, there was a 16.5% increase in non-performing loans, rising from KSh 182 billion to KSh 212.1 billion. To address this, KCB increased its loan loss provision to KSh 12.2 billion.
KCB’s total assets reached a new peak of KSh 1.97 trillion, reflecting substantial growth of KSh 112.3 billion. Customer deposits also saw a slight increase of 1.3% to KSh 1.49 trillion. Both assets and deposits have continued to grow consistently over the past decade.
“KCB Group demonstrated remarkable strength and adaptability amid global and local challenges, by delivering good asset growth and improved capital adequacy ratios,” stated Joseph Kinyua, chairman at KCB Group.
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Despite the impressive profitability and growth, there were some concerns. Interest expenses rose by 46.5% to KSh 36.1 billion, while operating expenses increased by 9.6% to KSh 44.3 billion.
Nevertheless, KCB’s shareholders’ funds grew by 14.1% to KSh 241 billion. “This performance has enabled the board to recommend an interim dividend of Sh1.50 per share,” commented Joseph Kinyua. The bank’s cost-to-income ratio was 46.8%, indicating a relatively efficient operating model.