This archive report was first published on 19 August 2021.
Thursday, August 19, 2021, marked a significant milestone for KCB Group as it announced a doubling of its net profit for the first six months to June, reaching Sh15.3 billion.
The bank's earnings were largely driven by reduced provisioning for bad debts, which decreased from Sh11 billion in the previous year to Sh6.5 billion in June 2021, allowing the lender to reinvest the profits.
Additionally, KCB made Sh47.1 billion through lending to the private sector and government, a 14 percent increase from Sh41.3 billion in the same period last year.
The bank's investment in National Bank of Kenya also paid off, with the subsidiary posting a Sh717.6 million half-year net profit, a significant improvement from a loss of Sh381.3 million in 2020.
'We saw a strong first half of the year for the business with improved economic activity. The resilient and diversified nature of our business has helped us navigate the unfolding impact of the Covid-19 pandemic,' said KCB Group chief executive Joshua Oigara at an investor briefing.
As the economy rebounds, lenders are reporting exceptional results, with customers resuming loan repayments and borrowing.
However, the bank noted that a huge chunk of its Sh95.7 billion non-performing loan occurred during the second half of 2020, highlighting the strain on customers and businesses due to the healthcare crisis.
With reduced loan loss provisioning, lenders are ploughing back the money to increase lending and boost their profits.
KCB Group's loan book grew to Sh606.9 billion in June this year, from Sh559.8 billion in the first half of last year, while customer deposits increased from Sh758.2 billion to Sh786 billion in a similar period.
