KCB Group posts Sh6.3b net profit in first quarter of 2020
PERFORMANCE: KCB Group profits after tax soared by eight per cent to Sh6.3 billion from Sh5.8 billion for the first quarter of 2020 ending March on account of stronger loan books and non-funded income.
The Nairobi Securities Exchange-listed lender recorded total operating income of Sh22.95 billion compared to Sh18.76 billion in first quarter of 2019.
According to the bank’s financial reports released yesterday, non-funded income surged 31 per cent to Sh7.9 billion from Sh6.1 billion, as enhanced digital banking, improved foreign exchange earnings and additional income from National Bank of Kenya bore fruit.
The Group’s balance sheet remained strong, growing 31 per cent from Sh725.7 billion to Sh947.1 billion while customer deposits increased to Sh740.4 billion after NBK acquisition and onboarding of new customers. An additional Sh53 billion was banked as deposits for the three months from December 2019.
The loan book expanded to Sh553.9 billion compared to Sh464.3 billion in 2019.
However, NBK acquisition amid increased depreciation in line with IFRS 16 and annual staff salary increments effected in first quarter saw operating costs surge to Sh11.1 billion, from Sh9.1 billion.
The bank bagged net interest income of Sh15 billion from government securities and lending during a period described as “below expectation” by KCB Group CEO and MD Joshua Oigara on account of a tough business environment.
“The operating landscape has further been exacerbated by Covid- 19 immediately shifting our focus to supporting our customers through the crisis,” he said.