Kenya’s biggest lender KCB Group saw an 8% jump in profit after tax in the first quarter to March, to 6.3 billion Kenyan shillings ($59 million), it said in a statement on Wednesday.
The rise was driven in part by a boost to interest income from loan book growth, the bank said.
The lender’s net profit in the period stood at Sh6.2 billion, up from Sh5.7 billion the year before.
The earnings included the performance of the newly-acquired subsidiary, National Bank of Kenya (NBK), whose net profit more than doubled to Sh154.9 million from Sh66.2 million over the same period.
KCB chief executive Joshua Oigara said the results were below expectations, attributing the assessment to a tougher economic environment.
“The operating landscape has further been exacerbated by Covid-19 immediately shifting our focus to supporting our customers through the crisis, pursuing business continuity and the safety and well-being of our staff and all other stakeholders,” Mr Oigara said.
KCB benefited from a 20.4 percent rise in interest income to Sh20.2 billion and a 30.5 percent surge in transaction-based revenue to Sh7.8 billion.
Its loan book expanded 19.2 percent to Sh553.8 billion while investments in government debt also increased 52.6 percent to Sh188 billion.
KCB’s stock of non-performing loans rose 70.5 percent to Sh66.2 billion, resulting in provisions for the bad debt jumping nearly 2.5 times to Sh2.8 billion.
The country’s biggest bank said the spike in defaults was due to the consolidation of NBK, which “brought on board Sh25 billion in non-performing loans (NPL)”.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to firstname.lastname@example.org