Kenya Commercial Bank (KCB) Group has increased its dividend pay-out to shareholders following a 74.5 per cent increase in net profit to Sh34.2 billion.
According to Chief Executive Joshua Oigara, increased income, cost control and lower reserving for loan defaults all contributed to the increase in net profit for the financial year ending December 2021, which was up from Sh19.6 billion in the previous comparable period.
“We made significant progress in achieving our 2021 strategic targets which delivered a strong financial performance that was in line with gradual economic recovery across all markets,” said Ogira.
National Bank of Kenya contributed immensely to KCB Group’s growth, reporting a 10-fold growth in net earnings to Sh1.017 billion compared to Sh177.7 million reported in 2020.
KCB’s non-funded income grew by 9.9 per cent to Sh30.9 billion on increased customer transactions, forex income and income from accelerated loan growth.
Revenue increased by 13.5 per cent to Sh108.6 billion on account of higher net interest income which was up 15.0 per cent to Sh77.7 billion.
“Non-funded income grew by 9.9 per cent to Sh30.9 billion on increased customer transactions, FX income and income from accelerated loan growth,” said Oigara.
Costs went up 11.9 per cent to Sh47.8 billion on account of an increase in staff and organisational costs, consolidation of Banque Populaire du Rwanda (BPR) and inflationary adjustments across the group.
Other operating expenses increased 2.8 per cent to Sh22.9 billion, helped by improved cost management across the Group.
However, the lender saw the ratio of non-performing loans (NPL) increase from 14.7 per cent to 16.5 per cent, which Oigara says signals the longer-term effects of COVID-19 impact.
“Several key sectors, largely construction, hospitality, and manufacturing continued to come under pressure with slow recovery,” he noted.
KCB Group drastically slashed the loan loss provisions by 52 per cent to Sh13.0 billion in 2021, down from Sh27.2 billion a similar period the previous year.
“The decrease is largely due to lower corporate and digital lending impairment charges after the deliberate action on Covid-19 related provisions absorbed in the previous year,” said the KCB Group CEO.