The results were delivered on the back of a five percent rise in interest income to Ksh25.4 billion ($250 million) as non-funded income grew 15 per cent to Ksh13.2 billion ($130 million).
“The bottom-line was impacted by 266 per cent jump in loan loss provision from Ksh0.8 billion ($8 million) to Ksh3 billion ($30 million). This is something we are looking at keenly to deliver a robust second half performance,” Group Chief Finance Officer Lawrence Kimathi commented Thursday during the release of results in Nairobi.
He said that the jump was as a result of absence of one off benefit of passing non performing loans through balance sheet as was last year during transitioning to new accounting standard.
The result puts KCB ahead of its closest competitor Equity Group which closed the period with Ksh11.92 billion ($115) net profit.
KCB’s growth in interest income was chiefly driven by 13.8 per cent growth in loan book, pushing up interest on loans and advances to customers to Ksh479 billion ($4 million) from Ksh421 billion ($4 million).
Retail loans grew at 12 per cent while corporate and mortgage grew at 10 per cent and five per cent respectively.
During the six month period, the Central Bank of Kenya kept benchmark lending rates for the sector at nine per cent meaning no commercial loan was priced higher than 13 per cent.
Following the results, the board has approved payment of an interim dividend of Ksh1.00 per share. This will be paid in November 2019.
More banks are expected to release their results on or before end of the month in line with CBK regulations.