Home Banking KCB Group Reports KShs. 40.8 Billion Net Profit

KCB Group Reports KShs. 40.8 Billion Net Profit

by Brian Yatich

KCB Group has reported a net profit of KShs. 40.8 billion for the full year ending December 2022, a 19.5% increase from KShs. 34.2 billion were reported in 2021.

The bank’s revenues also grew by 19.6% to KShs. 129.9 billion, driven by higher funded and non-funded income streams.

KCB Group CEO, Paul Russo, attributed the bank’s strong performance to its business strategy that is anchored on customer obsession, sharper execution, and productive organizational culture.

He noted that the business benefited from a vibrant core banking business, the growth of new business lines, and accelerated digital transformation.

Despite a challenging operating environment, KCB Group maintained positive momentum throughout the year, building on its enhanced digital capabilities, impetus in its regional businesses, and successful integration of Trust Merchant Bank (TMB), the bank’s latest subsidiary in the Democratic Republic of Congo.

The bank’s total assets grew by 36.4% to KShs. 1.55 trillion, while customer loans increased by 27.8% to KShs. 863 billion, driven by additional lending in the Kenya business, increased lending in the international businesses, and the acquisition of TMB.

Customer deposits hit the trillion shillings mark, increasing by 35.6% to KShs. 1.135 trillion, mainly from TMB and organic growth in the existing businesses. Shareholders’ funds also grew by 18.9% from KShs. 173.5 billion to KShs. 206.3 billion on improved and accumulated profits for the year to date.

KCB Group’s capital base remained well within both internal and regulatory limits, with core capital as a proportion of total risk-weighted assets standing at 13.9% against the statutory minimum of 10.5%. Total capital to risk-weighted assets ratio was at 17.1% against a regulatory minimum of 14.5%.

On asset quality, the ratio of non-performing loans (NPL) stood at 17.3%, largely driven by downgrades from the KCB Kenya business. Gross NPLs stood at KShs. 161.2 billion. Although both the NPL ratio and stock show an increase compared to the previous year, there is a remarkable reduction from the peak numbers in June 2022.

Despite increased business activities and the impact of BPR and TMB acquisitions, KCB Group managed to keep costs under control. Costs were up 24.1% compared to last year, but this was largely due to increased business activities and the impact of acquisitions. Provisions increased marginally by 1.7% compared to the previous year, reflecting the appropriateness in IFRS9 staging done in prior years.

KCB Group’s Board has proposed a final dividend payout of KShs. 1.00 per share, subject to shareholder approval. This is in addition to an interim payout of KShs. 1.00 per share, which was paid out in January 2023. This brings the total dividend payout for the year to KShs. 6.4 billion.

In December 2022, KCB Group completed the acquisition of TMB after receiving all the regulatory approvals and subsequently kicked off integration of the business to the Group.

The acquisition is part of KCB Group’s regional expansion strategy, which includes investments in its existing businesses and the acquisition of new businesses in the region.

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