KCB Group Plc has announced a jump in profit after tax by 6% to KSh 19.2 billion for the nine months ending September 30, 2019 from Ksh 18 billion in a similar period in 2018.
The lender attributes this growth to cost management initiatives across all businesses, significant growth in the loan book and non-funded income.
The bank’s CEO, MR Joshua Oigara said, “We had a strong quarter and the business witnessed growth across various segments. We made continued strong investments in our capabilities to serve customers better. The international businesses have continued to improve while our digital offerings are witnessing increased activity, giving the business impetus to continue growing.”
Total income was up 10% from KSh 54.2 billion to KSh 59.7 billion, with non-funded income increasing 16.9% attributable to the digital proposition, largely KCB M-PESA. Loans disbursed under this platform improved from KSh 23 billion last year to KSh 98 billion.
Net interest income expanded 7% to KSh 38.7 billion from KSh 36.3 billion primarily due to a growth in loan book and reduced cost of funds. The loan book closed at KSh 486.4 billion from KSh 435.3 billion, an improvement of 12%, driven by retail and corporate banking customer segment.
Fees and commissions increased by 28% to KSh 14.1 billion on diversified income streams with enhanced investments in digital channels.
Year on year, total pre-provision operating expenses were down 1% from KSh 26.8 billion to KSh 26.6 billion. Provisions for impairment increased to KSh 5.8 billion due to the increase in non-performing loans to total loan ratio which stood at 8.3%; well below the industry average of 12.6%.
The Group’s balance sheet expanded by 12% to KSh 764.3 billion from KSh 684.2 billion, with deposits up by 11% to KSh 586.7 billion supported by continued strong growth in personal and transaction accounts and underpinning the Bank’s focus on providing superior customer service.
KCB Group maintained a strong capital base well within both internal and regulatory limits. The core capital as a proportion of total risk weighted assets closed the period at 18.1% against the Central Bank of Kenya statutory minimum of 10.5%. Total capital to risk-weighted assets stood at 19.5% against a regulatory minimum of 14.5%.
Despite a tough operating environment in the countries KCB operates in, the international business (excluding the Kenya subsidiary) posted improved performance. The combined after-tax profit increased 8% to KShs. 1.3 billion. Other than the Ugandan business, the rest of the 4 banking subsidiaries returned a profit.
The acquisition of National Bank of Kenya (NBK) is expected to further cement KCB’s position in the domestic banking sector and strengthens its ability to access more business flows.
On November 1, NBK announced profits before tax of KShs. 675 million shillings for the period ended September 30, 2019, representing a 45% growth from a similar period in 2018.