Tier one lender rides on diversification and retail growth to register impressive results
KCB Group has announced an impressive 49% increase in profit after tax for the first nine months of 2024, totaling Kshs. 45.8 billion, compared to Kshs. 30.7 billion during the same period in 2023. The significant growth, attributed to diversification and strong retail sector performance, underscores the lender’s strategic focus on regional expansion and sustainable growth.
The Group’s revenue surged by 22% to Kshs. 142.9 billion attributed to funded and non-funded income streams. Subsidiaries outside Kenya played a notable role, contributing 36.6% of the Group’s profit after tax and 34% of total assets, underscoring the benefits of geographical expansion.
Resilience
Mr. Paul Russo, KCB Group’s Chief Executive Officer credited the bank’s adaptability and customer-focused approach for its resilience in a challenging operating environment. “Despite tough market conditions, we have stayed true to our commitment to walk the journey with our customers while ensuring our fundamentals remain strong,” said Mr. Russo. “ We are optimistic about closing the year on a high note, leveraging improving market conditions and our regional expertise,” he added.
The Group’s total assets hit KShs. 2.0 trillion, kept afloat by stable growth in customer deposits, which reached Kshs. 1.5 trillion. Retail lending emerged as a key driver of growth, with net loans and advances increasing to Kshs. 1.1 trillion.
Net interest income rose by 24%, supported by improved yields and increased lending to high-potential segments. Non-funded income also delivered strong results, with contributions from foreign exchange income, transaction fees, and revenues from Trust Merchant Bank (TMB) in the Democratic Republic of Congo.
While income grew, the Group maintained a disciplined approach to cost management. Total costs increased by only 11%, driven by higher staff expenses, technology investments, and prudent provisioning for non-performing loans (NPLs).
The Group’s NPL ratio closed at 18.5%, reflecting economic pressures across its markets. To counter the impact, KCB raised its provisions by 12.2% year-on-year and implemented measures to improve asset quality. In the same vein, it maintained strong capital buffers, with its core capital to total risk-weighted assets ratio standing at 16.5%, well above the regulatory minimum of 10.5%. Additionally, return on equity rose to 25.6%, up from 19.6% a year earlier, while shareholders’ funds grew by 14% to KShs. 249 billion.
Customer experience
KCB’s efforts to lead in customer experience, financial inclusion, and sustainability have been widely recognized. The bank was recently ranked among Kenya’s top three most valuable brands by Brand Finance and received accolades for customer excellence and its women-focused banking solutions.
KCB Group Chairman, Dr. Joseph Kinyua, expressed confidence in the Group’s ability to deliver sustained value to shareholders. “With our strong capital base, robust governance, and a focus on sustainable business practices, KCB is well-positioned to navigate the evolving economic landscape and drive growth in it markets,” said Dr. Kinyua.
KCB Group is set to close the year with a strong momentum, positioning itself as a leader in East Africa’s banking sector as it prioritizes innovation and diversification.
