KCB half year net earnings hit KES 16.1B as assets balloon to KES 1.86 trillion

KCB Group PLC announced Wednesday a 54% surge in total assets to KES 1.86 trillion in the first half of 2023, as net profit closed at KES 16.1 billion.

The robust balance sheet growth was propelled by the acquisition of Trust Merchant Bank in December 2022, along with a spike in customer deposits to KES 1.47 trillion underscoring steadfast consumer confidence, according to the financial statement.

Consequently, the loan portfolio swelled 32% to KES 964.8 billion from KES 730.3 billion in the first half of 2022, as lending remains robust.

Revenues climbed 22.2% to KES 73.1 billion, lifted by the consolidation and expansion of Trust Merchant Bank, the ascent in customer lending, and non-funded income streams. Fees, commissions, digital transactions and volumes fueled non-funded income gains.

However, profit after tax was substantially dampened by hefty provisioning on facilities in KCB Kenya, inherited legal claims in National Bank of Kenya, and restructuring expenses undertaken to optimize the organizations, KCB CEO Paul Russo explained.

The Group also increased loan loss provisions on foreign currency loans given the challenging macroeconomic climate across markets.

“Despite a tough economic environment across our markets, the business remained resilient delivering robust balance sheet and regional growth,” said Russo. “Profitability was squeezed by mounting funding costs, prudent provisioning on legacy loans, and legal claim provisions at NBK.”

Russo added the company has taken necessary actions and with improved liquidity, aims to accelerate performance in the second half of 2023 while assisting distressed consumers.

Shareholders’ equity ticked up 20% to KES 218 billion from higher profits. KCB Group maintained healthy capital ratios, with core capital representing 15% of total risk-weighted assets against a 10.5% minimum.