KCB Group PLC recorded a 69% growth in net profit to Kshs 16.5 billion during the first three months of 2024, powering its position as East Africa’s most profitable bank and cementing leadership as the largest lender by assets.
The profit was boosted by revenue growth across all the Group network that also saw the balance sheet close the quarter at Kshs 2.0 trillion, from Kshs 1.6 trillion a similar period last year.
Total revenues increased by 31.6% to Kshs 48.5 billion driven by both funded and non- funded lines. The non-funded income, at 36% of the total revenues, was supported by increased transaction volumes from customer confidence in our brand, adoption of the digital banking and alternative channels in making banking accessible at the convenience of our customers.
KCB Group Chief Executive Officer Paul Russo says: “Despite a difficult operating environment across the region, we saw a strong revenue performance in the business as we entrenched prudent credit, liquidity, cost, and overall risk management. Consumer deposits continued to grow, a show of confidence that our clients have in the brand. Our deliberate investments in digital and payments capabilities as well as regional expansion approach continued to deliver impressive results.
“We continued to leverage Group capabilities through syndication of facilities and tapping on centres of excellence to drive operational efficiency. Under our shared services model, we prioritized automation of key processes, roll out of more products on our self-serve channels and review of loan application processes continued to drive customer obsession and reduce friction.
“Looking ahead, we are upbeat about the prospects in all the markets we operate in. More so, we seek to leverage the strong relationships we have built and our strong brand to drive growth in the medium term guided by our new 2024 – 2026 strategy dubbed: Transforming Today Together.”
Key financial highlights
- The Group Total Assets grew by 22.4% to Kshs. 2.0 trillion, driven by an increase
- in customer deposits
- Customer deposits increased by 25.4% to Kshs 1.5 trillion, largely driven by Kenyan operations
- Loans to customers rose by 12.2% to Kshs 1.13 trillion.
- Group businesses (excluding KCB Bank Kenya) contributed 17.9% in pretax profits and 13.1% in total assets, signaling the benefits of diversification to other markets outside Kenya.
- Cost to Income ratio was down to 43.3% from 51.2% on the back of strong income growth coupled with stringent cost management.
- Total costs increased 11.3% from Kshs 18.9 billion to Kshs 21.0 billion largely driven by inflationary pressures.
- The loan impairment charge was up by 53.4% from downgraded facilities. Overall, the Group’s gross nonperforming book stood at Kshs 205.3 billion which saw the NPL ratio close the quarter at 18.2%.
- Shareholders’ funds were up 11% during the period to close at Kshs 238.6 billion.
- Return on Equity was up from 19.7% to 28.6%.
- All banking subsidiaries except National Bank of Kenya (NBK) were compliant with their respective local regulatory capital requirements.
Outlook
“We are optimistic of the business prospects in the remaining part of the year, compared to last year. We have made tangible progress to sustain superior shareholder value by delivering strong financial performance while driving our agenda to build a future-proof business.
“Prudent deployment of our capital has ensured that we were able to remain resilient and deliver for our stakeholders,” said KCB Group Chairman Joseph Kinyua.