KCB net profit up 28pc on improved interest income
What you need to know:
- The lender announced a profit after tax of Sh19.6 billion, an increase from the Sh15.3 billion it recorded in a similar period last year.
- KCB’s interest income grew 15.7 per cent to Sh54.5 billion following a 31.5 per cent rise in income from government securities.
- Loan disbursements also rose 20 per cent to Sh730.3 billion as demand from personal households, trade, transport, and communications sectors went up.
KCB Group has posted a 28 per cent net profit increase for the half-year period to June driven by an increase in both interest and non-interest income and lower loan-loss provisions.
The lender yesterday announced a profit after tax of Sh19.6 billion, an increase from the Sh15.3 billion it recorded in a similar period last year even as its subsidiaries upped their contribution to the lender’s earnings.
KCB’s interest income grew 15.7 per cent to Sh54.5 billion following a 31.5 per cent rise in income from government securities.
Loan disbursements also rose 20 per cent to Sh730.3 billion as demand from personal households, trade, transport, and communications sectors went up.
The lender also cashed in on service and lending fees driven by increased activity in trade finance and foreign exchange income, which increased its non-funded income by 29.9 per cent.
“We delivered solid results, supported by our diversified business model as we sharpened our focus on customer obsession and execution to better support our customers in a rather difficult operating environment,” said KCB Group Chief Executive Paul Russo who replaced long-serving CEO Joshua Oigara in May.
“Despite some uncertainties and headwinds, we saw sustained signs of recovery across the region, allowing us to deliver stronger shareholder value.”
Interim dividend payment
KCB became the latest top lender to skip an interim dividend payment despite the sharp increase in net earnings citing the need to preserve cash amid uncertainties in the economy.
The bank paid Sh9.64 billion in dividends for the financial year to December at Sh2 per share.
Equity Group, which on Tuesday posted a 36 per cent growth in half-year net profits, also failed to pay an interim dividend.
Equity posted an after-tax profit of Sh24.4 billion compared to Sh17.9 billion in a similar period last year following a 29 per cent growth in interest income.
Other Nairobi Securities Exchange (NSE) listed banks that have skipped an interim dividend payment are Stanbic Bank and Standard Chartered Bank.
KCB recently signed a deal for the acquisition of a majority 85 per cent stake in the Democratic Republic of Congo’s (DRC) Trust Merchant Bank (TMB) pending shareholder and regulatory approval as the lender stepped gas on its regional expansion drive.
The acquisition at a value of Sh1.49 per share gives the lender an option to acquire the remaining stake in the future.