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KCB Group, Absa Bank Kenya and Stanchart Bank release their financial report for 2021

KENYA – KCB Group Plc profit for the year ended December 31, 2021, grew 74 per cent on economic recovery across markets.

The lender’s net earnings for the review period shot to KSh34.2 billion (US$299.08m) from KSh19.6 billion (US$171.40m) a year earlier, driven by increased income, cost management and lower credit provisions.

“This saw the Group post higher returns to shareholders,” KCB Group CEO Joshua Oigara said.

Revenues increased by 13.5 per cent to KSh108.6 billion (US$949.72m) on account of a rise in net interest income which was up 15 per cent to KSh77.7 billion (US$679.49m).

National Bank of Kenya contributed immensely to KCB Group’s growth, reporting a 10-fold growth in net earnings to KSh1.017 billion (US$8.89m) compared to KSh177.7 million (US$1.55m) reported in 2020.

KCB’s non funded income grew by 9.9 per cent to KSh30.9 billion (US$270.22m) on increased customer transactions, forex income and income from accelerated loan growth.

Operating costs rose by 11.9 per cent to KSh47.8 billion (US$418.01m) from KSh42.8 billion (US$374.29m) due an increase in staff and organisational costs, consolidation of Banque Populaire du Rwanda (BPR) and inflationary adjustments across the group.

Other operating expenses increased marginally by 2.8 per cent to close at KSh22.9 billion (US$200.26m) from KSh22.3 billion (US$195.02m) last year with improved cost management across the Group.

The ratio of non-performing loans (NPL) increased from 14.7 per cent to 16.5 per cent, signalling the longer-term effects of Covid-19 on the business.

Several key sectors, largely construction, hospitality, and manufacturing recorded slow recovery.

Provisions for the period reduced by 52 per cent to close at KSh13 billion (US$113.69m) from KSh27.2 billion (US$237.87m) a similar period last year.

The decrease has been attributed to lower corporate and digital lending impairment charge after absorption of Covid-19 related provisions in the previous year.

The lender further grew its balance sheet with total assets rising by 15.4 per cent to KSh1.139 trillion (US$9.96b), driven by organic growth across the businesses and acquisition of BPR.

Customer deposits went up by 9.1 per cent through acquisitions and additional customers in corporate and retail franchises across the Group.

The net loan book clocked KSh675.5 billion (US$5.91b) on increased lending to key segments such as Micro Small and Medium Enterprises (MSMES), consumer and corporate.

Shareholders’ funds grew 20.6 per cent from KSh142.4 billion (US$1.25b) to KSh171.7 billion (US$1.50b) on improved profitability for the period.

During the period, the lender successfully completed the acquisition of BPR on July 31, 2021, and has kicked off integration activities that will see the amalgamation of BPR and KCB Bank Rwanda into a single banking business.

“The benefits of our regional expansion continue to positively contribute to the KCB’s performance,” Oigara said.

He said the profit before-tax contribution from Group businesses went up to 13.7 per cent, putting the bank on a track towards its 20 per cent target this year.

The bank’s board has recommended a final dividend of KSh2.00 per share. This follows an interim dividend of KSh1.00 paid out in January this year.

The final dividend will be payable to the members by April 25. If approved, the full dividend per share for the year will be KSh3.00 for each ordinary share.

According to the financial results released Monday, the lender reported a profit after tax of KSh9 billion (US$78.71m) compared to KSh5.4 billion (US$47.22m) in the previous financial year.

KCB is the third major bank to release its results.

Absa financials

Absa recorded a KSh10.9 billion (US$95.32m) Profit After Tax for the year ended December 31, 2021 a 161 percent growth from KSh4.2 billion (US$36.73m) in 2020.

The bank attributed the rise to growth in interest income particularly in the small and medium enterprises segment which was supported to drive economic growth.

Total income grew by seven percent to KSh36.9 billion (US$322.69m), driven by higher interest income, which rose by eight percent.

ABSA Bank Chief Executive Officer said the growth was also supported by a significant reduction in impairments related to improving macroeconomic variables.

Customer assets increased by 12 percent to KSh234 billion (US$2.05b), total assets increased by 13 percent to KSh429 billion (US$3.75b) with customer deposits growing by 6 percent to KSh269 billion (US$2.35b).

Stanchart financials

Standard Chartered Bank Kenya’s net earnings grew 67 percent as the economy recovered from the Covid-19 pandemic.

Its pretax profit soared 70% last year to a five-year high but surging energy prices because of Russia’s invasion of Ukraine and other factors clouded the outlook.

The lender, which is controlled by Standard Chartered Plc, posted a pretax profit of KSh12.6 billion (US$110.4 million), as net impairment losses fell by nearly half with the easing of COVID-related restrictions.

Stanchart said its non-interest income, the share of revenue derived from transactions, grew by a quarter during the year, helped by its wealth management and financial markets business.

StanChart had KSh131 billion (US$1.15b) under management last year, he said. It has employed 100 certified wealth management advisers.

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