Markets rebound drives KCB profit up 74 percent to Sh34 billion
KCB Group full-year net profit has increased by 74 percent to Kes34.1 billion from Kes19.6 billion on higher income as a result of economic recovery across markets.
The regional lender’s total operating income jumped by 13.5 percent to Kes108.6 billion from Kes95.7 billion during a similar period last year.
KCB Group CEO Joshua Oigara said: “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.”
“Net interest income grew by 15.1 percent to Kes77.7 billion up from Kes65.5 billion in 2020 while non-funded income has grown by 9.6 percent to Kes30.9 billion from Kes28.2 billion,” said KCB Group Chief Finance Officer Lawrence Kimathi.
Non-funded income grew by 9.9 percent to Kes30.9 billion on increased customer transactions, forex income, and income from accelerated loan growth.
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The ratio of non-performing loans increased to 16.5 percent from 14.7 percent, signaling the longer-term effects of Covid-19 pandemic impact on business.
Several key sectors, largely construction, hospitality, and manufacturing continued to come under pressure with slow recovery.
Provisions for the period reduced by 52 percent to close at Kes13.0 billion from Kes27.2 billion a similar period last year. The decrease is largely due to lower corporate and digital lending impairment charges after the deliberate action on Covid related provisions absorbed in the previous year.
In the year, customer loans increased by 13.5 percent to Kes675.5 billion on increased lending to key segments such as Micro Small and Medium Enterprises, consumer and corporate customers.
Customer deposits increased by 9.1 percent to Kes837.1 billion due to organic growth mainly in the Kenyan market.
“The benefits of our regional expansion continue to positively contribute to the KCB’s performance. In 2021, the profit before-tax contribution from Group businesses went up to 13.7 percent, putting us on track towards our 20 percent target this year. KCB will continue exploring and pursuing attractive regional expansion opportunities to enhance our regional participation, accelerate growth, and maintain sustainable long-term performance,” said KCB Group Chairman Andrew Kairu.
