KCB Group Profits Surge 65% to KSh 61.8 Billion for the year ending 2024

Published By The Statesman For The Statesman Digital
9 hours ago

KCB Group has registered KSh 61.8 billion net profit in 2024, a 64.9% jump from KSh 37.5 billion in 2023 driven by an increase in revenue.

The total operating income increased 24% to KSh 204.87 billion in 2024 propelled by double digit growth in both interest income and non-funded income.

Net interest income increased 27.9% to KSh 137.3 billion driven by the loan up-pricing under the risk-based pricing regime and increased yields from government securities.

Subsidiaries outside of KCB Kenya contributed 30.3% to the group’s performance down from 35.1% in 2023 on the back of strong growth in KCB Bank Kenya.

However, total operating expenses increased 11.8% to KSh 122.9 billion which the lender attributed to “customer acquisition activities and investments in technology.”

“The strong performance illustrates our resolve over the past 3 years to build an organisation for the future that is anchored on delivering value for our customers, shareholders, and all stakeholders,” KCB Group CEO Paul Russo said in the earnings release.

Non-funded income grew 33.9% to KSh 67.5 billion primarily driven by a 62% increase in forex income. Total assets declined by 9.6% to KSh 1.96 trillion largely impacted by the appreciation of Kenya shilling against regional currencies.

Loans to customers ended 2024 9.6% lower at KSh 990.4 billion with the majority of loans extended to households and businesses in the manufacturing, real estate and trade sectors.

Customer deposits declined by 18.3% to KSh 1.4 trillion driven by the appreciation of Kenyan shilling, ceding market share for G2G oil deal and de-consolidation of NBK.

Bad Loans are Still Sticky

The lender saw the stock of gross non-performing loans (NPLs) increase by 8.4% to KSh 225.7 billion from KSh 208.0 billion previously, driven by the Kenyan business with downgrades mainly in real estate, agriculture and construction sectors.

This pushed the NPL ratio up to 19.2% from 17.4% in 2023 with manufacturing, real estate & construction sectors impacted the most. Despite the surge, the management decreased the loan loss provisions by 11% to KSh 29.9 billion.“The non-performing loan book has full coverage from cash provisions and collateral held,” Lawrence Kiambi, KCB Group Director of Finance noted.

The group, which also operates in Uganda, Tanzania, Rwanda, South Sudan, Democratic Republic of Congo and Burundi saw its earnings per share grew to KSh 19.00, from KSh 11.66 in 2023.

Due to adequate capital buffers in the Kenyan Banking Unit, the Board of Directors recommended a final dividend of KSh 1.50 per share bringing the total dividend to KSh 3.00 in 2024.

The dividend payout, which totaled KSh 9.6 billion in 2024, will be paid on or about 23 May 2025, to shareholders on the Register of Members at the close of business on 3 April 2025.