KCB net profit rises to Kshs. 6.4B driven by net interest income – KBC

KCB Group has shrugged off covid jitters to record a 2% rise in profit after tax which jumped to Kshs. 6.4 billion from Kshs. 6.3 in the first quarter of the year ending 31^st March 2021.

Chief Executive Officer Joshua Oigara attributes the growth to a surge in net interest income which grew 11% in the quarter under review to Kshs. 16.7 billion driven by a rise in interest earning assets and effective management of cost of funding.

“This growth was offset by a 20% decline in non-funded income due to slowdown in the digital lending and service fees waivers in Kenya to cushion customers from the pandemic. As a result, total income stood at KShs. 23 billion,” said Oigara.

Customer loans were up 7.8% to KShs.597.1 billion on account of additional lending during the period while customer deposits increased marginally by 1.2% to Kshs.749 billion.

The Group continued to enforce cost management initiatives, ring-fencing the business from the impact of the healthcare crisis.

Operating costs remained flat from the previous year, closing at KShs. 11.1 billion.

“The economic environment marginally improved in the quarter although the uncertainties from the pandemic remain a big risk to the outlook. Focus was on conserving cash, supporting customers navigate the crisis and implementing our strategic focus areas which are anchored on digital banking and excellence in customer experience,” said Mr. Oigara

The lender saw a significant rise in non-performing loans which increased to Kshs. 98 billion from Kshs. 66.2 billion recorded during the same quarter in 2020 while NPL ratio rose to 14.8% from 11.1% last year mainly on the back of COVID-19 related downgrades.

This saw the bank keep its loan loss provision a Kshs. 2.9 billion during the quarter under review.

At the close of the quarter, KCB Group balance sheet stood at KShs.977.5 billion up from Kshs.947.1 billion the previous year.

The lender recommended a a first and final dividend of Kshs.1 per share.

Going forward, Oigara says, “Quarter two of the year started with a month-long lockdown in Kenya, a reminder that the pandemic is not over yet. We however expect to see a recovery in the last two months of the quarter with an increased in uptake on our mobile platform – VOOMA and a strong balance sheet growth.”