KCB Profits Drop 8% as Lender Sees Operating Costs Surge


KCB Group's net earnings declined by 8% to Sh37.5 billion in the fiscal year ending December 2023 compared to the same period in the previous year, which was attributed to rising expenses and depreciation of the shilling. This marks a decrease of Sh3.3 billion from the Sh40.8 billion recorded in 2022.

Factors such as the inclusion of DRC's Trust Merchant Bank (TMB) subsidiary, voluntary retirement, and legal fees contributed to the increase in costs to Sh83.2 billion from Sh59.4 billion during the assessment period.

"Provisions increased by 154.7% from the downgraded facilities in Kenya and additional provisions on foreign currency facilities from the depreciating Shilling against hard currencies," said the bank in a statement. 

Nevertheless, the group's overall assets surged to Sh2.17 trillion, marking a 40% increase driven by the growth in customer deposits.

Similarly, profits grew to Sh165.2 billion, supported by a rise in income from earning assets and non-funded income, which increased by 33.9%.

Net interest income also saw a 23.9% rise, despite the elevated cost of funds in the market.

"We had a fairly good run in the 12 months in the wake of difficult economic times, with most of the business lines achieving strong organic growth. We have extended a helping hand to our customers through our loan book to support them to navigate and accomplish their ambitions," said KCB Group CEO Paul Russo. 

"As a result of growing customer trust in the brand, we saw deposits grow significantly during the period," he added. 



"Focus remained on robust cost management to give us room to invest in initiatives to drive growth and put the Group on a strong pedestal for better growth in 2024, supported by strong capital and liquidity buffers."

Meanwhile the Access Bank of Nigeria is set to acquire the National Bank of Kenya, a subsidiary of KCB. KCB to offload 100% of NBK shares to Access Bank Group in a move that will be overseen by the CBK, Treasury Ministry and government. This comes just five years after KCB acquired NBK in a government-backed rescue deal.



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