This archive report was first published on 21 May 2020.
On May 21, 2020, KCB Group Plc reported a KShs.6.3 billion profit after tax in the first quarter of 2020, ending March. This represents an 8% jump from the KShs. 5.8 billion posted in the same period last year.
The earnings included the performance of the newly-acquired subsidiary, National Bank of Kenya (NBK), whose net profit more than doubled to Sh154.9 million from Sh66.2 million over the same period.
According to KCB chief executive Joshua Oigara, the results were below expectations, attributing to the tougher macroeconomic environment exacerbated by Covid-19.
"The operating landscape has further been exacerbated by Covid-19 immediately shifting our focus to supporting our customers through the crisis, pursuing business continuity and the safety and well-being of our staff and all other stakeholders," Mr Oigara said.
Despite the challenges, the bank's total operating income rose by 22% to KShs. 22.95 billion in the period compared to KShs.18.76 billion in Q1 2019. Net interest income was up by 18% to KShs.15 billion, driven by additional investments in Government securities and lending.
Non-funded income grew by 31% to KShs.7.9 billion from KShs.6.1 billion, driven by digital banking, improved foreign exchange earnings, and additional income from National Bank of Kenya.
The bank's focus on digital transactions saw non-branch transactions rise by 97% up from 94 in Q1 2019, mainly driven by mobile, internet, and agency banking.
However, cost management was a challenge, with operating expenses increasing by 22% to KShs.11.1 billion, driven by the NBK acquisition, increased depreciation, and annual staff salary increments.
