KCB Group’s net earnings rose by 27.5 percent in the half-year period ended June 30 to Kes19.6 billion from Kes15.3 billion in 2021. The Board has not declared the payment of interim dividend for the period.
The jump in profits was driven by improved funded and non-funded income streams while regional subsidiaries stepped up their contribution to the business.
“We delivered solid results, supported by our diversified business model as we sharpened our focus on customer obsession and execution to better support our customers in a rather difficult operating environment,” said KCB Group CEO Paul Russo.
Interest income grew 15.7 percent to Kes54.5 billion a result primarily supported by a remarkable jump in earnings from government bonds.
The lender reaped big from expanded investment in treasuries as income from government securities shot up by 31.5 percent to make up the lion’s share of KCB’s Kes54.5 billion interest income.
Loans issued by the bank in the period closed at Kes730.3 billion, representing a 20.3 percent rise relative to June last year while investment in government bonds climbed 26.2 percent to Kes246.2 billion.
A 30 percent rise in non-interest income complemented the gains in funded income as the lender leveraged increased activity in trade finance and forex to earn more in service and lending fees.
The bank’s digital channels were crucial to this outcome as they accounted 98 percent of transactions underlining the diminished utility of agency banking for KCB.
Mobile lending values were up 23 percent to Kes91 billion while total values transacted on the mobile were up 22 percent to Kes1.28 trillion.
In the period, the regional lender’s operating costs went up by 20.3 percent on consolidation of BPR Bank subsidiary in Rwanda, increased spend on customer acquisition initiatives, investment in technology and higher staff costs.
Interest spending swelled 30.3 percent to Kes14 billion as cost of funding increased during the period under review as customer deposits grew to Kes909 billion, up by 15.6 percent from the previous year.
In the half, KCB’s total assets were valued at Kes1.21 trillion, up 18.4 percent on additional lending, deposits growth and the consolidation of BPR Bank.
In the period, the Group deepened its focus on scaling regional play by signing a definitive agreement with shareholders of Trust Merchant Bank (TMB) to acquire a majority stake in the Democratic Republic of Congo (DRC)-based lender.
The transaction is expected to close in the fourth quarter of 2022, subject to regulatory, shareholders and other approvals. This will see KCB acquire 85 percent of the shares in TMB with an option to acquire the balance in due course.
“Looking ahead, we remain confident of a stronger second half and an economic turnaround across the region. We remain focused on delivering on business growth while at the same time continuously building a socially responsible and sustainable business,” said KCB Group Chairman Andrew Wambari Kairu.