KCB Group Reports 65% Profit Surge and Resumes Dividends

KCB Group has reported a remarkable 65% increase in net profit to Ksh61.8 billion ($479.06 million) for the fiscal year ended December 31, attributed to strong regional investments and revenue growth. The group’s dividend payments have resumed, following an earlier freeze. Regional subsidiaries contributed significantly to profits, although some markets faced minor declines. KCB anticipates continued economic recovery and growth in credit supply.

The KCB Group has reported a significant 65% increase in net profit, reaching Ksh61.8 billion ($479.06 million) for the year ending December 31. This surge was attributed to growth in revenues from regional operations and enhanced income from customer loans, government securities, and forex trading. Notably, the dividend payout, which was paused in 2023, has resumed due to solid capital buffers established by the bank.
KCB’s regional subsidiaries, excluding KCB Kenya, contributed 30.3% to the group’s profit, with notable growth in the Democratic Republic of Congo at 28%, followed by Burundi at 23% and Tanzania at 20%. However, profits from operations in Rwanda and Uganda experienced slight declines of 3% and 1%, respectively.
The KCB Group is the largest lender in the region with assets totaling Ksh2 trillion ($15.5 billion). Its performance reflects a recovery from a previous period of declining profits, with a remarkable 77% profit growth for KCB Kenya itself. The board has recommended a final dividend of Ksh1.5 ($0.01) per share, totaling Ksh3 ($0.02) per share for the year, amounting to Ksh9.6 billion ($74.41 million) after the interim dividend paid earlier.
Chairman Joseph Kinyua expressed optimism for future economic activity across markets, driven by growth in service sectors and a recovery in private sector credit. The group’s total income also grew by 24% to Ksh204.9 billion ($1.58 billion), fueled by increased interest income and non-funded income through fees and commissions. KCB’s operations span across several countries including Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan, and the DRC, with a representative office in Ethiopia.
The contribution of KCB’s regional units to net loans saw a slight decrease, influenced by the appreciation of the Kenyan shilling. Customer deposits dropped by 18% to Ksh1.4 trillion ($10.85 billion) largely due to market share challenges and other financial adjustments, whereas the proportion of deposits from subsidiaries grew to 34.3%.

In conclusion, the KCB Group’s robust financial performance, characterized by a 65% increase in net profit and renewed dividend payments, highlights its successful regional expansion and revenue generation strategies. Despite some challenges in specific markets, the organization remains optimistic about future growth driven by economic recovery in key sectors. The continued investment in capital preservation and efficient operations positions KCB well for sustained success in the competitive banking landscape.

Original Source: www.zawya.com