KCB Overtakes Equity in Profit Race: After tax profits hit Sh44.5 Billion
Sustained growth in non-interest income, targeting more high net worth clients lifted KCB Group’s net profit by 31pc to $195m in the first nine months of the year, outpacing Equity Bank’s 23pc growth to $152m. KCB recorded an after-tax profit of Sh44.5 billion which was 48% increase and making KCB ahead of other financial institutions.
Explaining KCB High performance
KCB said that it had posted remarkable growth on the back of continued and aggressive revenue growth of all the subsidiaries; overall revenues rose by 22% to Sh142.9 billion. This increase was powered by both:
Funded Income: Enhanced by improved yields.
Non-Funded Income: Supported by improved FX earnings and strong result from the group’s operation in the Democratic Republic of Congo; Trust Merchant Bank .
Its regional subsidiaries apart from KCB Bank Kenya were the dominant performers contributing more than one-third of PAT and total net assets, thus affirming the effectiveness of the bank’s regionalization strategy.
CEO Paul Russo’s Optimism
Group CEO Paul Russo expressed confidence despite the challenging economic landscape:
“We have continued to walk the journey with our customers, whilst not losing sight of our core strate gettingics.”
This financial institution continues to control significant portions of the market share with total asset base standing at Sh2trillion and customer deposits totaling to Sh1.5trillion.
Equity Bank’s Strong Showing
Equity Bank, Kenya’s largest bank by shareholders’ numbers, was not left behind having recorded a net profit of KES 39.2 billion only. This growth was as a result of expanding income across its subsidiaries placed it as a powerful competitor in the financial industry.
Other Banking Giants also not lagging behind
Despite a slowing of the economy and losses amongst many corporate entities and layoffs, the wider banking sector already appears to be soaring. Here’s a snapshot of other top-tier performers:
Standard Chartered Bank Kenya
Net earnings rose more than 50% to Sh15.8 billion for Q3.
CEO Kariuki Ngari remains optimistic:
‘‘We are in a good place to be able to assist our clients to do this phase and we are optimistic of a good end of the year,”
I&M Group
Delighted shareholders with an interim dividend of $ 0.013 per share of shareholders’ worth Sh2.1 billion.
Recorded a net profit of Sh9.1 billion, an increase of 24 percent compared to the same period.
Absa Bank Kenya
They declared a Sh14.7 billion profit, a 20% increase from the same period a year earlier.
Co-operative Bank of Kenya
Recorded Sh19.2 billion in net earnings, just a 4.42% improvement from that of the same period in 2013.
Challenges Amid Success
However, this has been very much offset by increase in operating expenses, and provisions for non performing loans (NPLs). KCB group NPLs increased to Sh215.3 billion and the NPL ratio reached 18.5% due to customer’s ability to repay.
Why This Matters to You
Hiking banking sector performance suggests that the sector is hardy for business and a decisive driver of the Kenyan economy. To an investor, a customer or a stakeholder, these results are a clear indication that the lion share of the financial sector in Kenya is on an upward trend.