KCB Group Plc has posted a net profit of Kes.6.4 billion in the first quarter of 2021 ending March, a 1.8 % increase from the Kes 6.3 billion that was posted in Q1 2020, shaking off the effects of the COVID-19 Pandemic.
Net interest income in the group grew by 11% to close the quarter at Kes.16.7 billion. The lender attributed the rise to a rise in interest-earning assets and effective management of the cost of funding during the period.
The growth was offset by a 20% decline in non-funded income due to a slowdown in the digital lending and service fees waivers in Kenya to cushion customers from the pandemic. As a result, total income stood at Kes. 23 billion.
“The economic environment marginally improved in the quarter although the uncertainties from the pandemic remain a big risk to the outlook. Focus was on conserving cash, supporting customers navigate the crisis and implementing our strategic focus areas which are anchored on digital banking and excellence in customer experience,” KCB Group CEO & MD Joshua Oigara
As a result of the group’s initiatives to enforce cost management initiatives and ring-fencing the business from the impact of the prevailing pandemic, Operating costs in the group remained flat from the previous year, closing at Kes. 11.1 billion.
Loan provision remained at Kes. 2.86 billion in the quarter due to an increase in loan balances. The stock of Non-performing loans (NPLs) rose to Kes.98 billion up from Kes. 66.2 billion in 2020 while the NPL ratio rose to 14.8% from 11.1% last year mainly on the back of COVID-19 related downgrades.
The balance sheet stood at Kes.977.5 billion in the quarter ended 31st March 2021, up from Kes.947.1 billion the previous year. Customer loans were up 7.8% to Kes.597.1 billion on account of additional lending during the period while customer deposits increased marginally by 1.2% to Kes.749 billion.
Shareholders’ equity grew 8.8% from Kes. 135.5 billion to Kes. 147.5 billion as a result of improved profit for the period ended 31st March 2021.
KCB Outlook and proposed Dividend
“Quarter two of the year started with a month-long lockdown in Kenya, a reminder that the pandemic is not over yet. We however expect to see a recovery in the last two months of the quarter with an increased in uptake on our mobile platform – VOOMA and a strong balance sheet growth,” KCB Group CEO & MD Joshua Oigara
KCB Group said it will hold its 50th Annual General Meeting (AGM) on 27 May 2021 where the Group Board shall seek shareholder approval for the first and final dividend of Kes 1.00 per share which if approved, shall be paid on or before 26 June 2021, net of withholding tax to the shareholders that were on the register of Members at the close of business on 26 April 2021