KCB half year profit up 5pc to Sh12.7bn

KCB Group profit for the first six months of 2019 hit Sh12.7 billion, up five percent compared to same period last year.

The results were delivered on the back of a five percent rise in interest income to Sh25.4 billion as non-funded income grew 15 percent to Sh13.2 billion.

“The bottom line was impacted by 266 percent jump in loan loss provision from Sh0.8 billion to Sh3 billion. This is something we are looking at keenly to deliver a robust second half performance,” Group Chief Finance Officer Lawrence Kimathi commented Thursday during the release of results in Nairobi.

He explained that the jump was as a result of absence of one-off benefit of passing non-performing loans through balance sheet as was last year during transitioning to new accounting standard.

The result puts KCB ahead of its closest competitor Equity Group which closed the period with Sh11.92 billion net profit.

KCB’s growth in interest income was chiefly driven by 13.8 percent growth in loan book, pushing up interest on loans and advances to customers to Sh479 billion from Sh421 billion.

Retail loans grew at 12 per cent while corporate and mortgage grew at 10 per cent and five per cent respectively.

During the six-month period, the Central Bank of Kenya kept benchmark lending rates for the sector at nine percent meaning no commercial loan was priced higher than 13 percent.

Following the results, the board has approved payment of an interim dividend of Sh1.00 per share. This will be paid in November 2019.

More banks are expected to release their results on or before end of the month in line with CBK regulations.