KCB Group PLC Reports Robust First Half Performance Amid Challenging Economic Landscape

KCB Group PLC, a leading financial institution, has revealed impressive financial results for the first half of the year ending June 30, 2023, despite navigating a challenging economic environment.

The bank’s total assets surged by 54%, reaching KShs.1.86 trillion, while net profit closed at KShs.16.1 billion.

This robust balance sheet growth was attributed to multiple factors, including the integration of Trust Merchant Bank (TMB), a strategic acquisition completed in December 2022.

Moreover, customer deposits surged to KShs.1.47 trillion.

In tandem, the loan book saw a substantial increase of 32%, reaching KShs.964.8 billion from KShs.730.3 billion in the first half of 2022, reflecting KCB’s ongoing commitment to fostering business growth for its customers.

Notably, revenue soared by 22.2% to KShs.73.1 billion, propelled by the successful consolidation and expansion of TMB, a surge in customer loans, and robust non-funded income (NFI) growth. The NFI stream was buoyed by fees, commissions, and the sustained expansion of digital channel transactions and volumes.

However, the bank’s profit after tax bore the brunt of several factors, including aggressive provisioning on facilities in KCB Kenya, inherited legal claims in National Bank of Kenya (NBK), and the necessary staff restructuring expenses incurred in KCBK and NBK—a strategic investment aimed at optimizing organizational structure.

Also Read: KCB To Acquire DRC-based Trust Merchant Bank

“Despite a challenging economic environment across our operating markets, the business remained resilient delivering a strong balance sheet and increased contribution from regional businesses. Profitability was under pressure in the first half from increased funding costs on higher market deposit rates, prudent provisioning on legacy credit facilities, and provisions for legacy legal claims at NBK,” KCB Group CEO Paul Russo emphasized

Looking ahead, Russo expressed confidence in the bank’s prospects, citing improved liquidity and a sharpened focus on performance enhancement during the second half of the year.

Additionally, the bank remains dedicated to supporting distressed customers while maintaining a growth trajectory.

KCB Group Chairman Dr. Joseph Kinyua underscored the bank’s solid foundation for future growth. He highlighted the institution’s robust governance structures, digital capabilities, expansive regional presence, and the unwavering commitment of its workforce to support customers and stakeholders.

“We are deliberate in making a meaningful transformation for communities and making a greater contribution towards economic progress across markets,” Dr. Kinyua added.