Kenya Commercial Bank (KCB) Group doubled net income to $ 225 million in the third quarter, largely driven by higher affiliate income and lower credit losses.
The group’s loan book grew up 12% to $ 6.41 billion due to improved lending in Kenya, Uganda and Rwanda, while customer deposits grew 11% to $ 7.66 billion, mainly due to organic growth in Kenya.
Total group revenue increased 16 percent to $ 713.39 million. driven by rising interest rates on loans and government bonds and non-interest income from increased fees and commissions on banking transactions and foreign exchange trading.
The regional lender, listed on the Nairobi Securities Exchange (NSE), also claims that its strategic plan remains for the Ethiopian market despite the political unrest in the country on the Horn of Africa.
Concerns about Ethiopia
“We stand very strongly with our colleagues and our brothers and sisters in Ethiopia about it of the difficulties we see today. I also have co-workers in Ethiopia, but I know Ethiopia is more resilient to these kinds of difficulties. We are confident that our business will meet the challenges we see, “said the group’s CEO, Joshua Oigara, in an interview with The EastAfrican.
He added,” I am facing these short-term challenges I am so confident that Ethiopia will be conquered because it has been more resilient in the past. As it is, our chances in this market will remain despite the current challenges. ”
His stock on the NSE rose 1.68 percent to $ 0.4 per share on November 18th from $ 0.39 the previous day as investors digested the news about the lender’s performance and proposed dividend payment. Lender’s after-tax income for the nine months ended September 30 rose to $ 225 million from $ 97.32 million in the year-ago period, with regional subsidiaries contributing 21% of profits.
< p> KCB’s subsidiaries are located in Uganda, Tanzania, Rwanda, Burundi and South Sudan, as well as a representative office in Ethiopia. These subsidiaries, including the National Bank of Kenya by KCB, doubled their total contribution to the group’s net income in 2019 to $ 47.32 million from $ 24.1 million in the same period last year.
“This is a strong moment and strong growth for our business. We are seeing tremendous input from Rwanda. Overall, it’s a good story, our good growth in our SME business too,” said Oigara.
“Our entire international business is doing very well, which is very exciting. We are very well positioned to continue this dynamic this year.”
“This is the strongest for us Quarter since the Covid-19 pandemic 20 months ago, with clear signs of economic recovery in key sectors. While we are cautiously optimistic about the outlook, especially given the dynamism of the health crisis, we believe the worst is behind us ” said Oigara. p>
According to the unaudited financial statements of the group as a whole, costs rose nine percent to $ 309.82 million due to increased personnel costs. Performing Loans (NPLs) increased marginally from $ 866.07 million to $ 875.89 million, while total assets rose 15 percent to $ 10 billion, driven by organic growth in the group’s businesses and the acquisition of Banque Populaire du Rwanda (BPR) in Rwanda.
KCB completed the acquisition of BPR in August in line with its pan-African expansion plan and completed the integration activities as part of the full consolidation of BPR and KCB Bank Rwanda into one Bank entity initiated.