KCB Group has announced a mixed performance of its financial results for the first half of 2023.
The lender witnessed an increase in the group’s loans, deposits, assets, and income, but a decrease in its profits and asset quality.
“Profit after tax was greatly impacted by aggressive provisioning on facilities in KCB Kenya, inherited legal claims in National Bank of Kenya (NBK) and staff restructuring costs incurred in KCB Kenya and NBK being an investment to right-size the organizations,” the bank said.
“The Group also prudently raised its loan loss provisions on foreign currency denominated credit facilities on account of a challenging operating environment.”
Net loans: The group’s net loans grew by 32% to 964.8 billion, while its investment in government securities increased by 26% to 320.3 billion.
Deposits: The group’s customer deposits soared by 62% to 1.4 trillion.
Total assets: The group’s total assets expanded by 54% to 1.9 trillion.
NII: The group’s net interest income, which is the difference between interest earned and interest paid, rose by 12% to 45.5 billion.
NFI: The group’s non-funded income, which includes fees, commissions, and foreign exchange gains, jumped by 43% to 27.6 billion.
Provisions: The group’s provisions for loan losses and impairments spiked by 136% to 10.2 billion.
Gross NPLs: The group’s gross non-performing loans, which are loans that are overdue or in default, increased by 5% to 182.0 billion.
NPL ratio: The group’s ratio of non-performing loans to total loans declined by 410 basis points to 17.4%, indicating an improvement in loan quality.
PAT: The group’s profit after tax dropped by 18% to 16.1 billion.
“Looking ahead, noting the actions we have taken and with significantly improved liquidity, business focus is on accelerated performance in the second half of the year while supporting the distressed customers,” said KCB Group CEO Paul Russo.