KCB Profits Fall 43% to Sh 10.9B in 9 Months ending September 2020

KCB Bank Group recorded an after-tax profit of Sh 10.9b for the nine months ending September 2020, a 43% lower from 19.2b recorded for a similar period in 2019.

“This has been a challenging period for the business, staff, our customers and the economy, “ commented the Banks CEO, Joshua Oigara, noting that the bank’s “focus has been on keeping our staff and customers safe while at the same time giving business support to the communities we operate in as well as our customers.”

Oigara says “the pandemic has had a deep socio-economic impact and hence our decision to stand with our stakeholders.”

According to the KCB financials released on Wednesday, the company’s total income increased by 16% from Shs 59.7b to Shs 69.1b.

The net interest income increased from Sh38.7b to Sh47.9b recording a 24% increase which is a result of additional interests in government lending and securities.

During the 9 month period, non-funded income slightly rose by Sh 0.3b as it was impacted by the reduction of loan disbursements to mobile customers. Non- branch transactions stood at 98% from 95% in Q3 2019 which facilitated by mobile, internet, and agency banking.

Strict cost management measures were employed by the company due to the pandemic. As a result loan loss provisions were up to Shs. 20M from Shs. 5.8M. This was driven by changes impact of the pandemic on macroeconomic drivers and in customer risk profiles. However, customer deposits growth and acquisition of NBK expanded the company’s balance sheets by 27%.

Shareholders’ equity increased from 121.2 billion to Shs. 135.9.1 billion, recording a 12% increase. This is due to 12-month period growth earnings to September 2020.

Most of the key balance sheet ratios-liquidity, loan to deposit ratio, and cost of funds-showed an improvement at 38.1%, 74.7& and 2.7% respectively.

Non-performing loans (NPLs) rose to Shs.97.0 billion up from Shs 42.6 billion in 2019 due to the contraction of economic activity which was directly linked to the consolidation of NBK and COVID-19 related downgrades.

Despite the pandemic, the company is ‘projecting some recovery as the East Africa region finds stability living with the effects of the virus. The approach is conserving cash and managing cost,’ said Mr. Oigara.