The KCB Group has announced a 5 per cent growth in profit after tax for the period ending December 2019, to Ksh.25.2 billion. Speaking during the release of the results, KCB Group CEO and MD, Joshua Oigara attributed the growth to increased interest income from consolidated book with National Bank of Kenya.
In the period under review, the lender’s net interest income grew by 15 per cent to Sh56.1 billion from Sh48.8 billion in 2018. The loan book expanded by 17.4 per cent to Sh535.3 billion from Sh455.8 billion previously.
According to the bank, the business remained resilient despite the challenging economic conditions witnessed in the various markets and the wider global economy.
“The East African region continued to face various downside risks that ranged from adverse weather patterns to stress from currency fluctuations and the pressure from oil imports” said KCB Group CEO Joshua Oigara. “All business lines were strong on both funded and non-funded income as cost control, operational efficiency and driving excellent customer experience remained a top priority,” he added.
Enhanced investments in digital channels pushed non funded income up 22.6% to KShs.28.2 billion from KShs.23.0 billion in 2018. “Our investments in diversified channels are giving our customers a means to access banking services conveniently, at a competitive prices and in line with our purpose of simplifying their world to enable their progress” said Mr Oigara.
During the year under review, the number of non-bank transactions increased to 97% with a majority of them conducted via mobile devices. Mobile loans advanced increased to KShs. 212 billion from KShs. 54 billion in 2018. The cumulative disbursement via mobile over the past five years totaled to KShs. 319 billion.
KCB maintained its lending pattern in 2019, growing assets base despite lower asset yield, observed in the key market—Kenya— due to reduction of the benchmark lending rate.
Total assets surged 26% to KShs.899 billion from KShs. 714 billion in 2018. The key drivers for this growth were the loan book growth of 17 % to KShs
535.4 billion— reflecting the strong lending pipeline primarily driven by retail and corporate banking customer segment—and the customer deposits growth of 28% to KShs. 686.6 billion. The main driver for this growth was acquisition of NBK.
Key Financial Highlights
|Performance Measure 2019 vs 2018|
|Profitability||Net Profit – Up 5% to KShs.25.2B from KShs 24.0BTotal Operating Income- Up 17% from KShs.71.8B to KShs.84.3B|
|Operational Efficiency||Operating Expenses (excl provisions)- up 10.0% from KShs.35.0B to KShs. 38.5B.Cost to Income Ratio (excl. provisions) – 45.7%Cost of Funds- 2.8% from 3.2%|
|Balance Sheet Position||Total Assets- up 25.8% from KShs.714.3B to Kshs. 898.6BTotal capital to risk-weighted assets- 19.0% (CBK min 14.5%)Core capital to total risk weighted assets- 17.2% (CBK min 10.5%)|
|Key Ratios||Non Funded Income 33.4% from 32%Return on Equity -20.7%NPL Coverage- (IFRS)- 72.1% from 68.6%Liquidity Ratio- 37.1% from 33.3%|