NAIROBI, Kenya May 26-KCB Group PLC net profit surged 54.6 per cent to Sh9.9 billion in the three months ending March 2022 up from Sh6.4 billion a similar period last year.
The improved results were attributed to growth in total income and reduction in loan loss provision.
Revenues increased by 26 per cent to Sh29.0 billion on account of increase in interest income, an increase in non-funded income from lending activities and service fees, and a 21.1 per cent rise in earning assets.
“During the quarter, the business showed sustained resilience backed by our proactive approach towards driving income growth, managing liquidity, conservation of capital, and cost containment. Furthermore, a relentless focus on our strategy has enabled us to maintain robust asset growth and deliver healthy return on our investments,” said KCB Group CEO and MD Joshua Oigara.
The lender’s operational costs went up by 16.8 per cent to Sh12.9 billion from Sh11 .1billion.
Total assets increased by 19.4 per cent to Sh1.2 trillion while customer deposits rose by 12.9 per cent to Sh845.8 billion.
The deposits were utilized to fund net loans and advances which went up 18.0 per cent largely on account of improved corporate and retail lending to close the period at Sh704.4 billion.
The Group’s participation in Government securities recorded an increase of 32.6 per cent from Sh212.5 billion to Sh281.8 billion during the same period.
Net interest income grew by 18 per cent to Sh19.7 billion driven by increase in net loans and advances coupled with growth in investments in Government securities.
This was partially offset by an increase in interest expenses occasioned by tight market liquidity.
Non-funded income (NFI) grew by 47.2 per cent to Sh9.3 billion. This was driven by additional disbursements during the period which increased lending fees by 73 per cent.
Provisions decreased by 27.5 per cent from a similar period last year largely due to a drop in corporate and digital lending impairment charge after Covid-19 related provisions recognized in the full year 2021.
The non-performing book continued to come under pressure due to slow recovery in the construction, hospitality and part of the manufacturing sectors causing a deterioration from 14.8 per cent to 17.0 per cent.
The Group’s balance sheet expanded by 19.3 per cent to Sh1.2 trillion, driven by organic growth across the business and consolidation of BPR.
“We are optimistic of improved business growth in the remaining part of the year as economic fundamentals improve in the East African economy despite global threats and other local developments including the upcoming General Elections in Kenya. Our priority is to harness economic drivers to accelerate the pace of recovery and growth,” said KCB Group Chairman Andrew Wambari Kairu.
