This archive report was first published on 21 August 2021.
On August 21, 2021, KCB Bank announced a significant increase in its net profit for the first half of the year, reaching Sh15.3 billion. This substantial growth was largely attributed to increased loan repayments.
Compared to the same period in the previous year, when the lender recorded a profit after tax of Sh7.6 billion, this year's profit more than doubled. The surge in profit was a result of a reduction in impaired loans, including close to 90 per cent of the Sh105 billion that KCB restructured in line with a deal brokered by the Central Bank of Kenya.
This restructuring unlocked nearly Sh4.4 billion that had been set aside as insurance against possible defaults. Total operating income grew by 13.7 per cent to Sh51.2 billion, buoyed by increased lending activities and non-funded income.
KCB Group CEO and MD Joshua Oigara attributed the strong first half of the year to improved economic activity and the resilient and diversified nature of the bank's business, which had helped it navigate the adverse effects of the Covid-19 pandemic.
“We saw a strong first half of the year for the business with improved economic activity,” said Oigara in an investor briefing. “The business is well-positioned to catalyse the ongoing economic recovery as well as benefit from this resurgence,” he added.
Provisions for the period were down 40 per cent to Sh6.6 billion as the Covid-19 related impairments had been recognised in the 2020 full year, and the facilities restructured to cushion customers from the impact of the pandemic.
Net interest — from loans and advances — rose to Sh36.6 billion from Sh31.1 billion last year, on the back of higher interest-earning assets and effective management of cost of funding.
Andrew Kairu, KCB Group Chairman, expressed optimism about the bank's future, stating, “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.”
Joshua Oigara also announced plans to add another subsidiary in Rwanda, with the bank aiming to acquire 93 per cent of Banque Populaire Du Rwanda (BPR) in the coming days.
