KCB to Pay Dividends After Posting Sh30.6B Profit in Third Quarter

KCB Group has set aside Sh3.2 billion for dividends after net profit rose 21 percent to Sh30.6 billion in the first nine months of 2022.

The growth of revenues was driven by investments of customer deposits in government bonds and growth in interest income, increasing net profit from Sh25.2 billion reported for the same period last year.

“The board has proposed an interim dividend of Sh1.00 per share amounting to Sh3.2 billion,” said KCB Group CEO Paul Russo on Tuesday, November 15th.

The contribution of group businesses, which excludes KCB Bank Kenya stood at 16 percent up from 15 percent same time last year, driven by new businesses and the impact of BPR Bank, Rwanda investment.

“We are seeing strong revenue momentum across the corporate and retail business which positions us to meet our full year outlook. Our focus has been on delivering value and support to our customers to help them navigate the tough economic environment,” said Paul Russo on Tuesday. 

Total revenues by the lender went up 15.3 percent to Sh92.1 billion mainly driven by growth in non-funded income which increased by 30.2 percent on higher foreign exchange earnings and lending fees.

Commercial banks are harvesting heavy returns in the fixed income market as the government is forking a handsome 14 percent return on investments as seen in the recent infrastructure bond deal.

“Additionally, interest income grew mainly from an increase in our earning assets portfolio, in particular loans disbursed during the period and investment in government securities,” KCB said in a statement.

Operating costs went up 19.6 percent to Sh41.6 billion compared to Sh34.8 billion last year on account of investments at BPR Bank, increased business activities and increase in staff costs. 

The lender’s balance sheet expanded 13.7 percent with total assets standing at Sh1.28 trillion largely driven by growth in loans, investment in government securities funded by growth in customer deposits and additional borrowings.

Net loans and advances surged 16 percent to Sh758.8 billion from additional lending to the personal, construction and manufacturing sectors across the Group.

Customer deposits increased by 7 percent to Sh922.3 billion on higher deposits from the growth of current and savings accounts.

Shareholders’ funds grew by 15 percent from Sh163.0 billion to Sh187.8 billion on improved and accumulated profits for the year to date.

The group maintained strong capital buffers with core capital as a proportion of total risk weighted assets standing at 14.5 percent against the statutory minimum of 10 percent. Total capital to risk-weighted assets ratio was at 18 percent against a regulatory minimum of 14.5 percent.

In September, KCB Group Plc shareholders approved the proposed acquisition of the DRC-based lender Trust Merchant Bank SA (TMB).

This followed the signing of a definitive agreement with shareholders of TMB to acquire 85 percent of the shares in TMB while the existing shareholders will continue to hold the balance for a period of not less than 2 years after which KCB will have the right to acquire their shares.

The acquisition is part of KCB’s ongoing strategy to expand its regional participation, accelerate growth and maintain sustainable long-term regional success.

KCB Group, which has presence in six countries and a representative office in Ethiopia, has been keen to tap into new growth opportunities while reinforcing existing market capabilities.