KCB 2019 Profit after Tax up 5% to sh.25.2 billion

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Customers at a KCB bank./COURTESY

KCB Group Plc. announced a sh.25.2 billion after tax profit for the 2019 financial year, a five per cent increase from sh.24 billion in 2018.

The Group which acquired the National Bank of Kenya (NBK) inthe last quarter of 2019, had a total income of sh.84.3 billion, a 17 per cent increase from the previous year.

Operating expenses grew much slower by 10%, resulting in an improved cost to income ratio of 45.7%, compared to 48.7% in 2018.

The improved profitability and shareholder returns were driven by loan growth, non-funded income, cost management and National Bank of Kenya (NBK) acquisition.

KCB Group Chief Executive Office and Managing Director, Joshua Oigara said the business remained resilient despite the challenging economic conditions witnessed in the various markets and the wider global economy.

“The East African region continued to face various downside risks that ranged from adverse weather patterns to stress from currency fluctuations and the pressure from oil imports” he said while releasing the results in Nairobi on Thursday.

Both the Kenya business and the international subsidiaries delivered strong income growth.

Net interest income expanded 15% to sh.56.1 billion from sh.48.8 billion primarily due to a 17% growth in loan book, digital lending and additional interest income from NBK. Fees and commissions surged 39% to sh.19.8 billion on diversified income streams.

Enhanced investments in digital channels pushed non funded income up 22.6% to sh.28.2 billion from sh.23.0 billion in 2018.

“Our investments in diversified channels are giving our customers a means to access banking services conveniently, at a competitive prices and in line with our purpose of simplifying their world to enable their progress” said KCB MD.

According to KCB, last year represented a significant period with the maturity of the Group’s 2015-2019 Strategic Plan which was anchored on customer experience, network spread, youth agenda, digital financial services, new businesses, robust IT platform, and strategic partnerships. This year marks the start of the new 3-year strategic cycle.

“The banking sector is seeing heightened regulatory scrutiny, increased competition, amplified adoption of digital banking, and shifting economic environment across the East African region. In the face of these shifts, we have positioned ourselves and tapped into opportunities presented as we navigate past the challenges. We are focused on deepening our contribution towards financial deepening and economic development,” said KCB Group Chairman, Andrew Kairu.

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