This archive report was first published on 15 August 2019.
On August 15, 2019, KCB Group announced a 5% increase in profit for the first six months of 2019, reaching Sh12.7 billion.
The growth was driven by a 5% rise in interest income to Sh25.4 billion and a 15% increase in non-funded income to Sh13.2 billion.
However, the bottom line was impacted by a 266% jump in loan loss provision from Sh0.8 billion to Sh3 billion, according to Group Chief Finance Officer Lawrence Kimathi.
Kimathi attributed the increase to the absence of a one-off benefit from passing non-performing loans through the balance sheet, as was the case last year during the transition to a new accounting standard.
Despite this, KCB's growth in interest income was largely driven by a 13.8% growth in loan book, pushing up interest on loans and advances to customers to Sh479 billion from Sh421 billion.
Retail loans grew at 12%, while corporate and mortgage loans grew at 10% and 5% respectively.
During the six-month period, the Central Bank of Kenya kept benchmark lending rates for the sector at 9%, meaning no commercial loan was priced higher than 13%.
Following the results, the board approved the payment of an interim dividend of Sh1.00 per share, which will be paid in November 2019.
