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KCB half year profit falls by Sh. 5.2 billion as corona bites

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2020 KCB Half Year Profit: The Kenya Commercial Bank has become the first local lender to post a profit drop in the midst of the coronavirus pandemic. The bank’s profit for the first six months of the year has dropped by a staggering Sh. 5.2 billion.

In the period, net profit stood at Sh. 7.5 billion down from the Sh. 12.7 billion that was recorded in the same period the previous financial year. This represented a 40 per cent decline. “The fall in profit largely caused by increased provisions in the wake of higher credit risk due to the COVID-19 pandemic,” the bank said in a statement. “The second quarter was the toughest in our recent history as the pandemic hurt economic activity across markets. Most of the key sectors were nearly shut down and our customers continue to face unprecedented challenges.”

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The ratio of non-performing loans (NPLs) to total loan book increased to 13.7 percent from 7.8 percent in 2019, mainly due to consolidation of National bank of Kenya and heightened defaults associated with the pandemic.During the period, the bank’s gross non-performing loans more than doubled to Sh. 83.8 billion from Sh. 39.1 billion. Net interest income jump 22 per cent to Sh. 31 billion.

The bank’s total assets grew by 28 percent to Sh. 953.1 billion, funded by customer deposits and existing business growth while net loans and advances grew 17 percent to close the period at Sh. 559.9 billion. At the same time, the bank’s customer deposits increased by 35 percent to Sh. 758.2 billion. 2020 KCB Half Year Profit.

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