NAIROBI, Kenya, Mar 12 – Kenya Commercial Bank Group (KCB) has posted a 5 percent jump in its net profit to hit Sh25.2 billion for the year ended December 31st, 2019.
The Group’s Managing Director Joshua Oigara attributed the jump in profit to the acquisition of the National Bank of Kenya (NBK), which led a 28 percent growth in customer deposits.
During the period, customer deposits reached Sh686.6 billion, up from Sh537.5 billion.
“We have seen our customer base increase over the last year, now standing at 22.8 million customers. Our branch network has also improved to 342 branches across the region given the successful acquisition of National Bank,” Oigara said.
Net interest income expanded by 15 percent to Sh56.1 billion, compared to Sh48.8 billion posted a year earlier, driven by a 17 percent growth in loan book, digital lending and additional interest income from National Bank.
The bank’s total assets surged by 26 percent to Sh899 billion from Sh714 billion in 2018, driven by loan book’s growth, which hit Sh535.4 billion.
Mobile loans advanced increased by Sh212 billion from Sh54 billion in 2018.
“This reflects the strong lending pipeline primarily driven by retail and corporate banking customer segment,” Oigara said.
During the financial year, the bank reports that almost all of its transactions – 97 percent – were performed outside the branch.
The ratio of non-performing loans to total loan book increased to 10.9 percent – 7.4 percent excluding that of National Bank. This led to provisions for impairment increased to Sh8.9 billion from Sh2.9 billion.
The bank also revealed that its subsidiaries saw a 7.4 percent growth; KCB Tanzania was the best performer, posting Sh998 million profit after tax, followed by KCB Rwanda with Sh949 million.
The gains made from the acquisition gains were however diluted by higher provisions for loan loss at National Bank.
National Bank posted Sh1.9 billion in loan loss, compared to Sh185 million the previous year, effectively hurting the bottom-line. Consequently, the Bank posted a loss after tax of Sh302 million for the period.
The bank paid an interim dividend of Sh1 per share in November 2019, with directors recommending a final dividend for the year of Sh2.50.