Key highlights
Net profit – up 74% to Kshs 34.2 billion compared to Kshs 19.6 billion.
Dividends – final dividend of Kshs 2.00 per share, after an interim dividend of Kshs 1.00 per share was paid in January 2022
Revenue – Increased 13.5% to Kshs 108.6 billion driven by higher interest income, non-funded income, and lower cost of funding
Costs – Up by 11.9% to Kshs 47.8 billion
Total assets – Increased 15.4% to Kshs 1.139 trillion
Customer loans – up 13.5% to Kshs 675.5 billion
Customer deposits — up 9.1% to Kshs 837.1 billion
KCB Group Plc has announced a 74% increase in 2021 full year net profit to KShs 34.2 billion which the lender attributes to economic recovery across markets.
The lender says increased income, cost management and lower credit provisions powered the Group to post higher profits.
“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,” KCB Group CEO Joshua Oigara said.
“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.
“During the period, we deliberately focused on supporting customers to weather the healthcare storm. We expect good business momentum this year with a projected economic recovery across markets.”
Income
Revenue increased by 13.5% to Kshs 108.6 billion on account of higher net interest income which was up 15.0% to Kshs 77.7 billion.
“Non-funded income grew by 9.9% to KShs.30.9 billion on increased customer transactions, FX income and income from accelerated loan growth,” said Oigara.
Costs
Costs went up 11.9% to Kshs 47.8 billion on account of an increase in staff and organisational costs, consolidation of Banque Populaire du Rwanda (BPR) and inflationary adjustments across the group.
Other operating expenses increased 2.8% to Kshs 22.9 billion, helped by improved cost management across the Group.
Loan provisions
However, the lender saw the ratio of non-performing loans (NPL) increase from 14.7% to 16.5%, which Oigara says signals the longer-term effects of COVID-19 impact.
“Several key sectors, largely construction, hospitality, and manufacturing continued to come under pressure with slow recovery,” he noted.
KCB Group drastically slashed the loan loss provisions by 52% to Kshs 13.0 billion in 2021, down from Kshs 27.2 billion a similar period the previous year.
“The decrease is largely due to lower corporate and digital lending impairment charge after the deliberate action on Covid-19 related provisions absorbed in the previous year,” said the KCB Group CEO.
Dividend payout
The Board of Directors has recommended a final dividend of Kshs 2.00 per share. This follows an interim dividend of Kshs 1.00 paid out in January this year.
The final dividend is payable to the members of the company on the share register at the close of the business on Monday 25 April 2022.
If approved, the full dividend per share for the year ended 31 December 2021 will be Kshs 3.00 for each ordinary share.
Outlook and Group Strategy
KCB is optimistic of better prospects this year on the back of a projected economic recovery in East Africa.
“We are optimistic about the East African economy’s inherent medium and long-term potential despite the looming effects of the geopolitical crisis in Europe, lurking threats of COVID-19 and other local developments, including the upcoming General Elections in Kenya,” said KCB Group Chairman Andrew Wambari Kairu.
“The priority is to identify suitable investment prospects and consumption drivers to accelerate the pace of recovery and growth. As the growth gains momentum, it will lead to many more opportunities for all sectors of the economy and in turn, inclusive growth.”