KCB Group Plc. delivered improved profitability and higher returns to
shareholders for the full year ended December 2019, posting a 5% jump in
profit after tax to Kshs 25.2 billion. Net earnings also increased from Kshs. 24 billion in 2018 on the back of loan book growth, non-funded income from the digital banking and cost management initiatives across the business.
Acquisition of National Bank of Kenya (NBK)—a transaction that was finalized in the last quarter of 2019— solidified the Group’s base from a revenue and balance sheet position.
KCB Group CEO and MD, 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. “All business lines were strong on both funded and
non-funded income as cost control, operational efficiency and driving
excellent customer experience remained a top priority,” said Mr. Oigara.
Both the Kenya business and the international subsidiaries delivered strong
income growth.
Income Growth
Total income increased 17% to Kshs 84.3 billion while operating expenses
grew much slower by 10%, resulting in an improved cost to income ratio of
45.7%, compared to 48.7% the previous year.
Net interest income expanded 15% to Kshs 56.1 billion from Kshs 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
Kshs 19.8 billion on diversified income streams.
Enhanced investments in digital channels pushed non funded income up
22.6% to Kshs 28.2 billion from Kshs 23.0 billion in 2018.
Kenyans also continued to take advantage of fast mobile connectivity with the number of non-bank transactions increasing to 97% with a majority of them conducted via mobile devices during the year under review. Mobile loans advanced increased to Kshs 212 billion from Kshs 54 billion in 2018. The cumulative disbursement via mobile over the past five years totaled to Kshs 319 billion.
