KCB Group has cemented its position as the wealthiest bank in Eastern Africa after growing assets above Sh2 trillion on increased customer deposits.
Results for the year ended December 31, 2023, show the regional lender's assets grew by 40 per cent to Sh2.17 trillion.
The Group's net earnings rebounded from a drop reported last May to Sh37.5 billion on strong funded and non-funded lines.
Revenues increased to Sh165.2 billion, boosted by funded income from earning assets while non-funded income which grew by 33.9 per cent was supported by increased transactions across the network, adoption of digital banking and alternative channels, entry into other markets and trade finance business.
Net interest income increased by 23.9 per cent, withstanding the high cost of funds in the market.
Speaking when the lender released results in Nairobi on Wednesday, KCB Group chief executive officer Paul Russo said the bank had a fairly good run in the 12 months despite the difficult economic times, with most of the business lines reporting strong growth.
"We have extended a helping hand to our customers through our loan book to support them to navigate and accomplish their ambitions. As a result of growing customer trust in the brand, we saw deposits grow significantly during the period,” Russo said.
He said they focused on robust cost management giving room for investment in initiatives that drove growth and put the group on a strong pedestal for better growth in 2024, supported by strong capital and liquidity buffers.
Russo added that the bank remains committed to opening doors of opportunity for all stakeholders in line with the brand purpose, 'For People For Better' and at the same time running a business that is anchored on sustainable practices.
The contribution of Group businesses (excluding KCB Bank Kenya) to the overall profitability was up to 36.7 per cent from 12.2 per cent.
The lender's gross earnings for the year under review stood at Sh17.8 billion from Sh7 billion the previous year; an indication that regional expansion is paying off.
Costs were up from Sh59.4 billion to Sh83.2 billion from the full-year consolidation of the DRC subsidiary, TMB, voluntary retirement programme and one-off legal costs taken up during the year from litigations.
On asset quality, the ratio of non-performing loans (NPLs) dropped to 16.6 per cent due to loan book growth, down from 17.3 per cent, as the Group enhanced its efforts to improve asset quality.
The stock of NPLs stood at Sh199.1 billion with provisions increasing by 154.7 per cent from the downgraded facilities in Kenya and additional provisions on foreign currency facilities from the depreciating Kenya Shilling against hard currencies.
On the balance sheet, customer deposits increased by 48.9 per cent from Sh1.14 trillion to Sh1.7 trillion, largely from KCB Bank Kenya business and the full-year consolidation of TMB.
This affirmed the Group’s strong deposit-funded profile, which is supported by its extensive network across East Africa.
Customer Loans grew by 28.7 per cent from additional disbursements made during the year to clock Sh1.2 trillion from Sh934 billion in 2022.
Shareholders’ funds stood at Sh236.4 billion from Sh206.3 billion the previous year, a 14 per cent growth in profitability during the year.
The Group maintained strong capital and liquidity levels with core capital, a proportion of total risk-weighted assets standing at 14.5 per cent against the statutory minimum of 10.5 per cent.
The total capital-to-risk-weighted assets ratio was at 17.8 per against a regulatory minimum of 14.5 per cent.
All banking subsidiaries except NBK were compliant with their respective local regulatory capital requirements.
The regional lender has initiated plans to offload NBK to an Egyptian bank after it reported a Sh3.3 billion loss in the year under review compared to a Sh719 million profit same period the previous year.
KCB Group continued to deepen its commitment to its Sustainability and ESG priorities where it seeks to support 14 Sustainable Development Goals anchored on corporate social investments and driving sustainable business practices.
The Group is committed to positioning itself as a leading green financier and positioning 2jiajiri as its signature social impact platform.
"Our priorities have been greatly facilitated through the KCB Foundation where we continue to roll out interventions in education, training, and employment for young people,'' Russo said.
Launched in 2016, the 2jiajiri programme has created over 119,000 jobs while 22,959 youth have received technical and entrepreneurial training.
On education, this year, it gave 1,000 scholarships to needy students to join various secondary schools countrywide.
On the green agenda, the bank rolled out a tree-planting initiative dubbed KCB Linda Miti where at least 400,000 trees have been planted across the network, with a target of planting 1.5 million trees by the end of next year.
