Regional bank Kenya Commercial Bank has doubled its profit after tax for the period ended June 2021.
In a statement, KCB says its profit reached Sh15.3 billion, up from Sh7.6 billion posted during a similar period last year.
During the period under review, revenues increased by 14 percent on account of higher interest income driven by an increase in earning assets and a lower cost of funding.
The Group’s total income increased by 13.7 percent to Sh51.2 billion during the period, with net interest income going up by 17.7 percent to Sh36.6 billion from Sh31.1 billion last year.
This was on the back of higher interest-earning assets and effective management of the cost of funding during the period.
The Group’s assets stood at Sh1.02 trillion, up from Sh953 billion reported in the first half of 2020.
Commenting on the performance, KCB Group CEO Joshua Oigara said the bank’s resilient and diversified nature has helped them navigate the unfolding impact of the COVID-19 pandemic.
“The business is well-positioned to catalyze the ongoing economic recovery as well as benefit from this resurgence,” he added.
The Group also witnessed a 7 percent rise in operating costs on account of an increase in staff costs as the Group enforced cost management initiatives to ring-fence the business from the impact of the ongoing healthcare crisis.
The Group’s loans also recorded growth, growing by 9 to close at Sh606.9 billion.
The bank says its risk fell to 2.2 percent from 4 percent, with the ratio of non-performing loans at 14.3 percent from 13.7 percent in 2020.
The stock of non-performing loans closed the half at Sh95.7 billion, from Sh83.9 billion during the same period last year.
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“Most of this increase occurred during the second half of last year, highlighting the strain on customers and their business because of the healthcare crisis,” the bank said in the statement.
During the period, provisions were down 40 percent to Sh6.6 billion as the COVID-19 related impairments had been recognized in the full year 2020, and the facilities restructured to cushion customers from the impact of the pandemic.
According to the bank’s financial statement, the Group attained a historic milestone with the balance sheet closing the half at Sh1.02 trillion, up from Sh953 billion, marking a 7 percent jump.
During the period, customer deposits were up by 4percent to Sh786.03 billion mainly due to current and savings accounts.
Shareholders’ equity grew 16 percent from Sh132 billion to Sh153 billion on improved profit for the period.
KCB’s total capital stood at Sh172.6 billion, representing a total capital to risk-weighted assets ratio of 21.8 percent against a regulatory minimum of 14.5 percent.
The Group’s core capital as a proportion of total risk-weighted assets closed the period at 18.2 percent against the Central Bank of Kenya statutory minimum of 10.5 percent.
Despite the impact of the healthcare crisis, the Group said it is on track to achieve its three-year Beyond Banking Strategy which is anchored on delivering the very best in customer experience and driving a digital future.
This is according to the bank’s chairperson Andrew Kairu who said that while the pandemic is still in the midst, the rollout of a vaccine globally has brought hope that the crisis will soon be under control.
“The resilience and providence of our concerted efforts to reinforce the sustainability of our business have enabled us to support and walk with our customers, staff and other stakeholders,” said Kairu.
“Looking forward, we believe we shall see the operating environment, and consequently our customer businesses continue to recover,” he added.
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He also confirmed that the bank is nearing its acquisition of a majority stake in Banque Populaire du Rwanda PLC (BPR) and the African Banking Corporation Tanzania Limited (BancABC Tanzania) in Rwanda and Tanzania respectively.
Kairu said the transaction will bolster the Group’s market share in these two key markets and grow the contribution of international businesses to the Group.