Shareholders of KCB Group will not receive any dividend pay-outs after the firm recorded a 40% drop in Net earnings.
The Group failed to declare any interim dividends after reporting net earnings of KSh 7.6 Billion for the h1 results.
The move to cancel any dividend payments this half will save the Group Sh3.2 billion.
KCB boss Joshua Oigara said the March to June period has been the most difficult quarter for nearly ten years at the bank, citing the impact of coronavirus-related defaults and loan restructuring on the banking industry as drivers for the fall.
During the past six months, the lender has restructured facilities worth KSh 101 billion to shield distressed borrowers against effects of the pandemic.
With the previous dividend standing at Sh1 per share shareholders will have to wait for the third quarter to reap from their investment.
The Group’s balance sheet grew by 28% to KSh 953.1 Billion, funded by customer deposits and existing business growth.
Net loans and advances grew 17% to close the period at KSh 559.9 Billion. On the funding side, customer deposits were up 35% to KSh 758.2 Billion.
For the first six months, the ratio of non-performing loans (NPLs) to total loan book increased to 13.7% from 7.8% in 2019, mainly due to consolidation of NBK & heightened defaults associated with the pandemic.
The stock of Non-Performing Loans more than doubled to KSh83.9Billion up from KShs 39.1Billion over a similar period last year.
The lender raised its provision for potential loan losses 3.6 times to Sh11 billion from Sh3 billion.
This was in response to the gross non-performing loans more than doubling to Sh83.8 billion from Sh39.1 billion.
The group’s total comprehensive income, which includes net income and unrealized income, such as unrealized gains or losses on hedge/derivative financial instruments and foreign currency transaction gains or losses, declined from KSh 11.7 Billion in H1, 2019 to KSh 8.6 Billion at the end of six months period ended 30th June 2020.
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