- KCB Group’s net profits have maintained a steady upward trajectory since 2020.
- Total assets dropped to KSh 2.0 trillion, marking the first decline in the Group’s asset base since 2016.
- The Group’s loan book has continued its consistent expansion, growing to KSh 1.1 trillion, extending a decade-long trend of increased lending to key market segments.
- Customer deposits fell by 7.12% to KSh 1.5 trillion, the first drop since 2016
KCB Group PLC has reported a KSh 45.8 billion net profit after tax for the first nine months of 2024, a 49% increase from the KSh 30.7 billion recorded during the same period last year. This growth was fueled by a 22% surge in revenues, which rose to KSh 142.9 billion. The increase was driven by strong performance across both funded and non-funded income streams.
The contribution of subsidiaries, excluding KCB Bank Kenya, was pivotal to the Group’s results, accounting for 36.6% of the profit after tax and 34% of total assets.
KCB Group CEO Paul Russo highlighted the resilience demonstrated by the Group in navigating tough economic conditions while maintaining robust fundamentals.
“The operating environment has been tough across all our markets, but we have continued to walk the journey with our customers while ensuring our key fundamentals remain strong. We are optimistic of a strong end of the year, riding on improving market conditions, solutioning for customers and tapping the great strength of our people,” he said, while releasing the results.
Russo further emphasized the importance of regional trade, stating that KCB’s deliberate investments in connecting millions across Africa and beyond are not only driving financial performance but also creating positive social impacts.
“The Group continued to leverage its deep understanding of local markets and cultures, allowing us to provide tailored financial solutions to customers wherever they are in the region. We have made deliberate investments to support regional trade and connect millions of people across the world to opportunities on the African continent and beyond whilst making a positive social impact in the communities,” he added.
The Group’s net interest income increased by 24%,while non-funded income saw a boost from foreign exchange earnings, transaction fees, and revenues generated by Trust Merchant Bank (TMB), KCB’s Democratic Republic of Congo-based subsidiary. However, the challenging economic environment was reflected in the Group’s rising stock of gross non-performing loans (NPLs), which grew by 15.1% to KSh 215.3 billion, resulting in an NPL ratio of 18.5%. To mitigate the impact, provisions for NPLs were increased by 12.2% year-on-year.
The Group’s total assets declined by 5.07% to KSh 2.0 trillion, while customer deposits fell by 7.12% to KSh 1.5 trillion. Despite these declines, customer loans grew marginally by 0.51% to KSh 1.1 trillion. Total costs increased by 11%, driven by higher staff expenses, technology investments, and prudent provisioning for NPLs.
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Shareholder returns remained strong, with return on equity improving to 25.6% from 19.6% in the previous year. Shareholders’ funds also grew by 14% to KSh 249 billion, up from KSh 219 billion. KCB maintained strong capital buffers, with the Group’s core capital as a proportion of total risk-weighted assets at 16.5%, well above the regulatory minimum of 10.5%. The total capital to risk-weighted assets ratio stood at 19.3%, significantly exceeding the minimum requirement of 14.5%. All banking subsidiaries, except National Bank of Kenya (NBK), remained compliant with local regulatory capital requirements.
KCB Group Chairman Dr. Joseph Kinyua lauded the Group’s performance, stating: “The Group business is well positioned to deliver stronger shareholder value, riding on its solid capital and liquidity positions, robust governance and dedication to sustainable business practices. We foresee remarkable resilience with recovering economic conditions across markets.”