KCB Group has delivered a strong first-half performance, with profit before tax climbing 20.8% to KSh49.3 billion, as increased income, loan growth and tighter cost management strengthened the regional banking group’s financial position.
The performance has also translated into higher returns for shareholders, with the KCB Group board recommending an interim dividend of KSh3 per share, up 50% from the KSh2 paid in the corresponding period last year.
The proposed payout amounts to KSh9.64 billion, underscoring the group’s commitment to progressively increasing dividend distributions.
Balance sheet crosses KSh2 trillion mark
KCB’s balance sheet expanded by 16.8% to KSh2.3 trillion, supported by growth in both customer deposits and lending.
Customer deposits increased 15.1% to KSh1.7 trillion, while gross loans rose 14.2% to KSh1.3 trillion as the bank increased lending across its retail, SME and corporate segments.
The growth was supported by new customer acquisition as well as increased borrowing among existing customers.
Group Chief Executive Officer Paul Russo attributed the results to KCB’s diversified business model and regional presence.
“Our strong half-year performance reflects the resilience of KCB Group’s diversified business model, the strength of our regional footprint, and the confidence our customers continue to place in us,” Russo said.
He said the group would continue supporting businesses and households while accelerating digital transformation and creating long-term value for shareholders and communities.
Income growth powers profitability
Total income rose 9.5% to KSh108.1 billion, with non-funded income emerging as a key contributor to growth.
Non-funded income increased 15.4% to KSh34.1 billion, while funded income grew 7% to KSh74 billion.
The group’s regional operations also remained a significant contributor, with businesses outside KCB Bank Kenya accounting for 27.7% of profit before tax and 31.1% of the group’s total balance sheet.
The performance highlights the growing contribution of KCB’s regional franchise to the overall business.
Investment banking business records triple-digit growth
KCB’s non-banking subsidiaries also posted notable gains during the period.
KCB Investment Bank recorded a 226.6% increase in profit before tax to KSh503.2 million, driven by increased advisory mandates and capital markets transactions.
KCB Corporate Trustee Services reported a 79.8% rise in profit before tax to KSh142.5 million, supported by growth in trustee and fiduciary services.
Meanwhile, KCB Bancassurance Intermediary Limited contributed KSh335.4 million in profit before tax.
The group also made progress in managing credit risk, with gross non-performing loans falling by KSh17.3 billion to KSh203.8 billion, from KSh221.1 billion a year earlier.
As a result, the NPL ratio improved significantly to 15.1% from 18.7%.
KCB attributed the improvement to rehabilitation of distressed facilities, stronger recoveries and tighter credit risk management.
The loan-to-deposit ratio also improved to 78.8% from 79.5%, pointing to a healthy funding position.
Return on assets remained stable at 3.3%, while return on equity stood at a strong 21.1%.
Shareholders’ equity rises
Equity attributable to KCB Group shareholders increased by 16.3% to KSh357 billion, compared with KSh306.8 billion a year earlier.
The increase reflects stronger earnings, capital retention and continued balance sheet growth.
KCB said the group remains strongly capitalised, with its Core Capital to Risk-Weighted Assets ratio standing at 18.6%, comfortably above the regulatory minimum of 10.5%.
The Total Capital to Risk-Weighted Assets ratio stood at 21.6%, against a regulatory threshold of 14.5%.
KCB long-term growth
KCB Group Chairman Dr. Joseph Kinyua said the half-year performance demonstrated the effectiveness of the group’s governance framework and execution of its long-term strategy.
He said the lender would continue prioritising prudent risk management, innovation and sustainable growth while supporting economic development across its markets.
The strong capital position, improving asset quality and rising profitability leave KCB with room to continue financing customers, invest in its businesses and maintain its progressive dividend policy.
With the interim dividend now set to rise to KSh3 per share, KCB’s half-year results offer shareholders not only stronger earnings, but also a larger share of the value created by the group’s expanding regional banking franchise.