KCB Group Plc Posts a Net Profit of KShs. 5.18Bn in Q1 2018
Total Operating Income up 7% to KShs.16.9bn, driven by steady revenue growth.
A sustained income growth pushed KCB Group Plc net profit up by 14% to KShs. 5.18 billion for the 3-month period ending March 2018.
The increase from KShs. 4.5 billion posted in the same period last year came as a majority of the revenue streams delivered a strong performance amid a marginal rise in operating expenses.
KCB Group CEO and MD Joshua Oigara said the lender has kicked off the year on a strong footing with the retail and corporate businesses showing great potential to deliver better earnings in the remaining part of 2018.
Key Performance Highlights
|Total Assets: Up 7% from KShs. 605.7bn to KShs. 647.4bn
Net Loans and Advances: Up 6% from KShs 395.4bn to KShs. 418.6bn
Customer deposits: Up 9% from KShs. 457bn to KShs.496bn
Long term debt funding: Down 5% from KShs. 23.5bn to KShs. 22.5bn
|Profit Before Tax: Up 14% from KShs. 4.5bn to KShs.5.1bn
Net Interest Income: Up 10% from KShs. 10.3bn to KShs. 11.4bn
Provisions for bad debts: Down 37% from KShs. 958Mn to KShs. 600Mn.
The outlook for the year is favorable with an expected improvement in economic conditions leading to a pickup in investments across the East African region. The business remains strong and our portfolio mix gives us an opportunity to tap into this recovery, said Mr. Oigara.
According to the financials released on Wednesday in Nairobi, non-interest income remained relatively flat due to a drop in forex earnings largely attributable to low transaction volumes in South Sudan. Fees and commissions grew by 5 % from KShs. 3.4 billion to KShs. 3.5 billion.
KCB, said the Group CEO, is keen on further bolstering non-interest income with a continued investment in new technology-based financial solutions focused on enhancing the customer journey by providing convenient access to a host of products and services.
By March 2018, KCB had over 13 million mobile customers and disbursed over KShs. 8 billion in loans through the mobile banking platform during the quarter.
According to the numbers, transactional activity continued to shift away from branches, with non-branch transactions standing at over 85% of the total volumes. At least 57% of transactions were handled on mobile, 20% were done through the Bank’s agents and point of sale terminals and 10% via the ATM network.
Interest income grew 11 % from KShs.14.1 billion to KShs.15.7 billion as a result of growth in the loan book which climbed 6% to KShs. 418.6 billion.
The international business continued to show stability and resilience, despite a harsh operating environment in some of the markets like South Sudan where hyper-inflation impacted earnings.
Operating expenses remained within inflationary increase posting a growth of 6% from KShs. 7.8 billion to KShs. 8.3 billion. This reflects the effort and focus on cost management to systematically and consistently reduce cost to income ratio.
KCB balance sheet expanded to KShs. 647.4 billion from KShs. 605.7 billion posted in the first quarter of 2017. Net Loans and Advances were up 6% from KShs. 395.5 billion to KShs. 418.6 billion while customer deposits rose by 9% from KShs. 456.8 billion to KShs. 496.4 billion. Shareholder funds were marginally down 2% from KShs 101.2 billion to KShs. 99.6 billion in a period that saw long term debt funding also decline 5% from KShs. 23.6 billion to KShs. 22.5 billion.
The Bank maintained strong capital buffers, keeping all parameters within regulatory and internal targets. The Group’s core capital as a proportion of its total risk weighted assets was 460 basis points above the Central Bank of Kenya statutory minimum of 10.5% a further indicator that the Group was on a firm capital footing. Overall, the Group’s total capital as a proportion of its risk-weighted assets stood at 15.3% against a regulatory target of 14.5%. Total capital adequacy ratio dropped by 130bps largely driven by the impact of the adoption of the IFRS 9, which came into effect from January 2018.
The Group foresees a strong growth for the year 2018. We are focused on delivery of our key strategic initiatives around excellent customer experience, growth in our digital financial service offering, strong business growth, operational efficiency, talent management and driving shareholder value, said the Group CEO.