KCB Group reported a 27.2% increase in revenue for the year ending December 31, 2023.
However, pretax profit dropped 15% to KSh 48.5 billion ($367.42 million) due to higher loan loss provisions and other costs.
This represents a decline of Sh3.3 billion from Sh40.8 billion registered in 2022.
“Provisions increased by 154.7% from the downgraded facilities in Kenya and additional provisions on foreign currency facilities from the depreciating Kenya Shilling against hard currencies,” the lender said in a statement.
Key Highlights
- Strong Revenue Growth: Revenue rose significantly, driven by interest income (up 23.9%) and non-interest income (up 33.9%).
- Deposit Growth: Customer deposits increased by 48.9% to KShs 1.7 trillion, reflecting strong customer trust.
- Loan Growth: Customer loans grew by 28.7% to KShs 1.2 trillion.
- Profit Decline: Pretax profit fell due to higher provisions for bad debts and other expenses, including the full-year consolidation of their DRC subsidiary and a voluntary retirement program.
- Regional Expansion: The Group’s businesses outside Kenya saw increased profitability, contributing 36.7% to overall profit compared to 12.2% the previous year.
- Strong Capital and Liquidity: KCB Group maintains a healthy capital buffer with core capital exceeding regulatory requirements.
“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,” the group’s Chief Executive Officer, Paul Russo, said.
“As a result of growing customer trust in the brand, we saw deposits grow significantly during the period,” he added.
Outlook
KCB Group anticipates continued economic pressures in the region but remains focused on growth.
It plans to leverage its strong regional presence and international business to support Pan-African trade opportunities.
No Dividend for shareholders
Finance director Lawrence Kimathi revealed that since acquiring NBK in December 2019, KCB has invested approximately Sh14 billion in the subsidiary.
“We still believe that KCB Kenya is not yet where we would want it to be from a capital point of view and it is for this reason that the board has decided that we shall not be having any dividend payout out of the 2023 results. This year, we want to conserve capital,” said Mr Kimathi.
