Kenya’s largest bank by asset base KCB Group outpaced its biggest rival Equity Bank in the first nine months of the year after its profit after tax jumped by nearly half to Sh44.5 billion.

KCB Group said yesterday the strong performance was driven by sustained revenue growth across all subsidiaries.

Equity Bank, which is Kenya’s largest lender by customer base, had earlier reported net earnings of Sh39.2 billion also largely on account of increased funded and non-funded income across subsidiaries.

The strong performance by the top-tier lenders in Kenya’s banking sector is seen as a positive sign for the broader financial sector amid a slowing economy marked by massive corporate losses and layoffs.

KCB said yesterday its overall revenue climbed 22 per cent to Sh142.9 billion, backed by an increase in both funded and non-funded income lines.

It said contribution from regional subsidiaries (excluding KCB Bank Kenya) expanded significantly, accounting for more than a third of profit after tax as well as of total assets. 

The lender said this highlights the success of its diversification strategy.

Group chief executive Paul Russo expressed optimism about the bank’s trajectory despite a challenging economic environment.

“We have continued to walk the journey with our customers while ensuring our key fundamentals remain strong,” Russo said during the earnings announcement on Wednesday.

KCB reported total assets of Sh2 trillion, backed by customer deposits that reached Sh1.5 trillion. 

Net interest income rose 24 per cent, fueled by improved yields, though this was countered by a rise in interest expenses due to higher funding costs.

Non-funded income benefited from foreign exchange earnings and strong performance from its DRC-based subsidiary, Trust Merchant Bank.

Amid the positive earnings, total costs climbed by 11 per cent largely driven by increased staff and technology expenses, as well as provisions for non-performing loans (NPLs), which stood at Sh215.3 billion.

The NPL ratio rose to 18.5 per cent, reflecting the challenges customers are facing in repaying their loans - prompting a 12.2 per cent increase in provisions year-on-year.

Separately, Standard Chartered Bank Kenya saw its net earnings for the third quarter surge by more than half to Sh15.8 billion on income growth.

“We have delivered a strong set of results in the nine months to September 2024 against a challenging macro environment by helping our clients navigate through these challenges and find opportunities to grow their business and wealth,” said Standard Chartered Bank Kenya chief executive Kariuki Ngari.

“We are optimistic as we get into the fourth quarter of an improving macro environment characterised by declining interest rates, falling inflation and stable currency. We are well positioned to help our clients through this phase and are confident of a strong finish to the year.”

At the same time, I&M Group has excited shareholders with an interim dividend of Sh1.30 per share - totalling to Sh2.1 billion - after posting Sh9.1 billion net profit in the nine months to September.

The group’s profit before tax increased by 24 per cent to Sh14.1 billion, up from Sh11.4 billion over the same period in 2023.

Earlier, Absa Bank Kenya reported a profit after tax of Sh14.7 billion, reflecting a 20 per cent increase compared to the same period last year.

Another tier one lender, Co-operative Bank of Kenya, posted a profit of Sh19.2 billion for the third quarter.

The lender attributed the 4.42 per cent jump in net earnings—compared to Sh18.5 billion reported the previous year—to growth in interest and non-interest income.