KCB Group grows revenue by 27%, profit unchanged in Q3

KCB Group, the largest financial institution in East Africa, has reported a flat net profit of Sh30.7 billion for the third quarter of 2023.

“We delivered strong, sustainable growth in revenue from new business lines, the deepening of digital channels, and market-leading customer value propositions,” said the group.

The group’s net profit was unchanged from the same period in 2022, mainly due to a 193.4% increase in provision for loan losses to Sh11.1 billion, reflecting the impact of the COVID-19 pandemic on the quality of its loan portfolio.

However, the group’s revenue increased by 27.0% to Sh117 billion, up from Sh92.1 billion in the same period last year, driven by a 39.0% increase in interest income from loans to Sh82 billion, up from Sh59 billion in the same period last year.

Customer deposits increased by 79.0% to Sh1.7 trillion, up from Sh0.95 trillion in the same period last year, indicating strong customer confidence and loyalty.

The group’s net earnings, which exclude the provision for loan losses, increased by 34.0% to Sh41.8 billion, up from Sh31.2 billion in the same period last year, demonstrating the group’s operational efficiency and resilience.

The group’s regional subsidiaries contributed 19.8% of the total revenue, up from 16.5% in the same period last year. The subsidiaries recorded a combined revenue of Sh23.2 billion, up from Sh15.2 billion in the same period last year, representing a growth of 52.6%.

Subsidiaries in Uganda, Tanzania, and South Sudan recorded the highest growth rates, with Uganda’s revenue increasing by 63.0% to Sh3.3 billion, Tanzania’s revenue increasing by 56.0% to Sh4.5 billion, and South Sudan’s revenue increasing by 41.0% to Sh1.9 billion.

Subsidiaries in Burundi and Rwanda also recorded positive growth, with Burundi’s revenue increasing by 16.0% to Sh1.2 billion and Rwanda’s revenue increasing by 12.0% to Sh6.8 billion.

Kenya, which accounts for 80.2% of the total revenue, recorded a modest growth of 5.0% to Sh93.8 billion, up from Sh89.4 billion in the same period last year.

The group’s subsidiary, the National Bank of Kenya (NBK), which was acquired in 2019, recorded a slight decline of 1.0% in its revenue to Sh5.4 billion, down from Sh5.5 billion in the same period last year.

“With a solid and well-diversified balance sheet, we are on track to meet our full-year ambitions going by the improved performance in the third quarter, supported by resilient business segments and subsidiaries. We have made great strides in investing in modernizing both our hardware and application infrastructure to improve capacity and system capability,” Group CEO Paul Russo said.