GROWTH

KCB grows net profit by 74% to Sh34.2 billion

The lender's net earnings for the year under review grew to Sh34.2 billion.

In Summary

•"This saw the Group post higher returns to shareholders," KCB MD Joshua Oigara said.

•The lender's net earnings for the year under review grew to Sh34.2 billion.

KCB chief executive Joshua Oigara on March 2. Photo/Enos Teche.
KCB chief executive Joshua Oigara on March 2. Photo/Enos Teche.

KCB Group Plc profit for the year ended December 31,2021 grew 74 per cent on economic recovery across markets.

The lender's net earnings for the review period shot to Sh34.2 billion from  Sh19.6 billion a year earlier, driven by increased income, cost management and lower credit provisions.

"This saw the Group post higher returns to shareholders," KCB MD Joshua Oigara said.

Revenues increased by 13.5 per cent to Sh108.6 billion on account of a rise in net interest income which was up 15 per cent to Sh77.7 billion.

National Bank of Kenya contributed immensely to to KCB Group's growth, reporting a 10 fold growth in net earnings to Sh1.017 billion compared to Sh177.7 million reported in 2020.

KCB's non funded income grew by 9.9 per cent to Sh30.9 billion on increased customer transactions, forex income and income from accelerated loan growth.

Operating costs rose by 11.9 per cent to Sh47.8 billion from Sh42.8 billion due an increase in staff and organisational costs, consolidation of Banque Populaire du Rwanda (BPR) and inflationary adjustments across the group.

Other operating expenses increased marginally by 2.8 per cent to close at Sh22.9 billion from Sh22.3B last year with improved cost management across the Group.

The ratio of non-performing loans (NPL) increased from 14.7 per cent to 16.5 per cent, signalling the longer-term effects of Covid-19 on the business.

Several key sectors, largely construction, hospitality, and manufacturing recorded slow recovery.

Provisions for the period reduced by 52 per cent to close at Sh13 billion from Sh27.2 billion a similar period last year.

The decrease has been attributed to lower corporate and digital lending impairment charge after absorption of  Covid-19 related provisions in the previous year.

The lender further grew its balance sheet with total assets rising by 15.4 per cent to Sh1.139 trillion, driven by organic growth across the businesses and acquisition of BPR.

Customer deposits went up by 9.1 per cent through acquisitions and additional customers in corporate and retail franchises across the Group.

The net loan book clocked Sh675.5 billion on increased lending to key segments such as Micro Small and Medium Enterprises (MSMES), consumer and corporate.

Shareholders’ funds grew 20.6 per cent from Sh142.4 billion to Sh171.7 billion on improved profitability for the period.

During the period, the lender successfully completed the acquisition of BPR on July 31, 2021 and has kicked off integration activities that will see the amalgamation of BPR and KCB Bank Rwanda into a single banking business.

“The benefits of our regional expansion continue to positively contribute to the KCB’s performance," Oigara said.

He said the profit before-tax contribution from Group businesses went up to 13.7 per cent, putting the bank on a track towards its 20 per cent target this year.

The bank's board has recommended a final dividend of Sh2.00 per share. This follows an interim dividend of Sh1.00 paid out in January this year.

The final dividend will be payable to the members by April 25. If approved, the full dividend per share for the year will be Sh3.00 for each ordinary share.

KCB is the third major bank to release its results.

Absa recorded a Sh10.9 billion Profit After Tax for the year ended December 31, 2021 a 161 percent growth from Sh4.2 billion in 2020.

Standard Chartered Bank Kenya’s net earnings grew 67 percent as the economy recovered from the Covid-19 pandemic.  

According to the financial results released Monday, the lender reported a profit after tax of Sh9 billion compared to Sh5.4 billion in the previous financial year.

All eyes are now on other big players Equity, Cooperative and NCBA  banks which are set to release their results in the coming days.


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