Sunday, March 26, 2023

KCB Group posts Sh. 40.8 billion full year net profit

KCB Group PLC recorded Sh. 40.8 billion in profit after tax for the full year ending December 2022 on higher funded and non-funded income streams.

This was a 19.5 per cent rise in profitability from Sh. 34.2 billion reported in 2021, KCB said on Wednesday during the release of the financials.

The profit before tax contribution of other subsidiaries excluding KCB Bank Kenya increased to 17.0 percent (up from 13.9 percent in 2021), riding on organic growth and increased scale in the businesses.

“The strong performance for the year was as a result of our business strategy that is anchored on customer obsession, sharper execution, and a productive organisation culture,” said KCB Group chief executive officer Paul Russo.

“The business benefited from a vibrant core banking business, growth of new business lines and accelerated digital transformation to post this record performance.”

Following these results, the KCB Board has proposed a final dividend payout of Sh. 1.00 per share, subject to shareholder approval. This is in addition to an interim payout of Sh. 1.00 per share which was paid out in January 2023. This brings the total dividend payout for the year to Sh. 6.4 billion.

Parameter 2021FY 2022FY Change
PAT Sh.34.2 billion Sh.40.8 billion 19.5%
Revenues Sh.108.6 billion Sh.129.9billion 19.6%
Costs Sh.47.8 billion Sh.59.4 billion 24.1%
Total Assets Sh.1.14 trillion Sh.1.55 trillion 36.4%
Customer Loans Sh.675 billion Sh.863 billion 27.8%
Customer Deposits Sh.837 billion Sh.1.135 trillion 35.6%


Revenues increased by 19.6 percent to Sh. 129.9 billion, driven by net interest income which grew by 11.5 percent, supported by earning assets and partially offset by interest expenses from higher borrowing costs and interbank market rates.

Non-funded income grew 39.8 percent largely from trade finance income, lending fees and commissions.

“Overall, we have positive momentum, and we shall build on this and ensure that we make significant step change in culture and performance, across all our business units,” said Russo.

“Despite a challenging operating environment, the belief in our people, enhanced digital capabilities, impetus in our regional businesses and successful integration of Trust Merchant Bank (TMB)— our latest subsidiary in the Democratic Republic of Congo— makes a good case for better performance” he added.

Costs were up 24.1 percent compared to last year on account of increased business activities and impact of BPR and TMB acquisitions.

Provisions increased marginally by 1.7 percent compared to the previous year; a reflection of appropriateness in IFRS9 staging done in prior years.

On asset quality, the ratio of non-performing loans (NPL) stood at 17.3 percent, largely driven by downgrades from the KCB Kenya business. Gross NPLs stood at Sh. 161.2 billion.

Whereas both the NPL ratio and stock show an increase compared to prior year, there is a remarkable reduction from the peak numbers in June 2022.

Total assets stood at Sh.1.55 trillion, growing 36.4 percent on higher in loans and investment in government securities and funded by growth in customer deposits and additional borrowings. Customer loans increased by 27.8 percent to Sh. 863 billion from additional lending in the Kenya business, increased lending in the international businesses and the acquisition of TMB.

Comparatively, customer deposits hit the trillion shillings mark, increasing by 35.6 percent to Sh. 1.135 trillion, mainly from TMB and organic growth in the existing businesses.

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Shareholders’ funds grew by 18.9 percent from Sh.173.5 billion to Sh.206.3 billion on improved and accumulated profits for the year to date.

KCB Group capital base remained well within both internal and regulatory limits. Core capital as a proportion of total risk-weighted assets standing at 13.9 percent against the statutory minimum of 10.5 percent.

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