- Reported a net profit of Sh10.9 billion from Sh19.2 billion-recorded in 2019
- Non-performing loans rose to 15.3 per cent compared to 8.3 per cent last year.
KCB Group Plc net profits for the nine months ended September 2020 dropped to Sh10.9 billion, 43 per cent lower than Sh19.2 billion-recorded same period last year.
The performance was largely impacted by increased provision on loans and advances in the wake of increased risk of credit default associated with the Covid- 19 pandemic.
For the period under review, the bank restructured customer facilities worth Sh105 billion, with non-performing loans rising to 15.3 per cent compared to 8.3 per cent last year.
Loan loss provisions rose to Sh20 billion from Sh5.8 billion in the previous period. This was driven by changes in customer risk profiles and impact of the pandemic on macroeconomic drivers.
KCB Group MD Joshua Oigara said the pandemic has had a deep negative socio-economic impact.
“This has been a challenging period for the business. Our focus has been on keeping our staff and customers safe while at the same time giving business support to the communities we operate in as well as our customers,’’ Oigara said.
Total income for the group was up 16 per cent to stand at Sh69.1 billion, compared to Sh59.7 billion reported in September 2019.
Net interest income increased 24 per cent to Sh47.9 billion from Sh38.7 billion, riding on additional interest from investments in government securities and lending.
During the period, non-funded income was slightly up from Sh21 billion to Sh21.3 billion, impacted by the reduction in loan disbursements to mobile customers during the period.
The Group’s balance sheet expanded 27 per cent to Sh972 billion, funded by customer deposits growth and acquisition of NBK. The lender is aiming to hit an asset book of Sh1 trillion at the end of the financial year.
Net loans and advances grew 19 per cent to close the period at Sh577.5 billion while customer deposits defied Covid-19 cash crunch to rise by 32 per cent to Sh772.7 billion.
Shareholders’ equity grew 12 per cent from Sh121.2 billion to Sh135.9.1 billion. This was driven by the growth in earnings over the 12-month period to September 2020.
Most of the key balance sheet ratios—liquidity, loan to deposit ratio and cost of funds—showed an improvement at 38.1 per cent, 74.7 and 2.7 per cent respectively.
The proportion of non-branch transactions stood at 98 per cent up from 95 per cent in Q3 2019 mainly driven by mobile, Internet and agency banking.
Oigara has however projected a better future outlook despite threats of the second wave of the virus in Kenya.
"Although the pandemic is far from over and likely to continue into the next year, further straining the business and economy, we are projecting some recovery as the East Africa region finds some stability in living with the effects of the virus,’’ Oigara said.