KCB Group Profit Drops 20%
Kenya’s largest lender, KCB Group Plc, reported a 20% drop in its first-half profit as the bank set aside more money to cover bad loans.
KCB Group Overview
KCB Group Plc is a financial services provider in East Africa. It is the largest bank in Kenya and the second-largest in East Africa by assets. The Group offers a wide range of banking services, including retail, corporate, investment, and microfinance banking. It also provides insurance, asset management, and real estate services.
KCB Group Financial Performance
KCB Group reported a 20% drop in its first-half profit to KES 8.2 billion ($77 million) from KES 10.2 billion in the same period last year. The bank attributed the decline to higher provisions for bad loans.
The bank’s net interest income rose 8.3% to KES 24.3 billion, while non-interest income increased by 11.2% to KES 10.2 billion.
KCB Group’s total operating expenses rose by 8.2% to KES 18.2 billion, mainly due to higher staff costs and other operating expenses.
The bank’s loan book grew by 8.3% to KES 514.3 billion, while customer deposits increased by 8.2% to KES 551.3 billion.
KCB Group Loan Loss Provisions
KCB Group set aside KES 4.2 billion in loan loss provisions, up from KES 2.7 billion in the same period last year. The bank said the higher provisions were due to the impact of the COVID-19 pandemic on its loan portfolio.
The bank’s non-performing loan ratio rose to 8.3% from 6.9% in the same period last year. The bank said it had taken steps to reduce its exposure to bad loans, including restructuring loans and providing additional collateral.
KCB Group Outlook
KCB Group said it expects its performance to improve in the second half of the year as the economy recovers from the pandemic. The bank said it is well-positioned to benefit from the recovery, with a strong balance sheet and a diversified loan portfolio.
The bank also said it is focusing on digital banking to drive growth. It has launched several digital initiatives, including mobile banking, digital payments, and online banking.
KCB Group Dividend
KCB Group declared a dividend of KES 0.75 per share, down from KES 1.00 per share in the same period last year. The bank said the lower dividend was due to the impact of the pandemic on its financial performance.
KCB Group Share Price
KCB Group’s share price has fallen by more than 20% since the start of the year. The bank’s shares are currently trading at KES 32.50, down from KES 40.50 at the start of the year.
KCB Group Summary
KCB Group reported a 20% drop in its first-half profit as the bank set aside more money to cover bad loans. The bank’s net interest income rose 8.3% to KES 24.3 billion, while non-interest income increased by 11.2% to KES 10.2 billion. KCB Group set aside KES 4.2 billion in loan loss provisions, up from KES 2.7 billion in the same period last year. The bank said it expects its performance to improve in the second half of the year as the economy recovers from the pandemic. KCB Group declared a dividend of KES 0.75 per share, down from KES 1.00 per share in the same period last year. The bank’s share price has fallen by more than 20% since the start of the year.