KCB Group Reports 65% Profit Growth and Resumes Dividend Payments

KCB Group’s net profit surged by 65% to Ksh61.8 billion driven by regional investments. The group resumed dividend payments after previous suspensions, benefiting from increased income across banking operations. Regional subsidiaries contributed 30.3% to profits, and the bank is optimistic about future economic growth.

KCB Group has reported a substantial increase in its net profit for the fiscal year ending December 31, rising by 65 percent to Ksh61.8 billion ($479.06 million). This growth was significantly influenced by enhanced revenue from regional subsidiaries, as well as higher customer loan income, government securities, and trading activities. As a result, the bank has resumed dividend payments, which were suspended in 2023 to fortify capital reserves.

The financial statements indicate that the group’s subsidiaries, excluding KCB Kenya, accounted for 30.3 percent of the profits, with all regional units, apart from those in Uganda and Rwanda, experiencing double-digit profit growth. Paul Russo, the group’s Chief Executive Officer, emphasized, “The strong performance illustrates our resolve over the past three years to build an organisation for the future that is anchored on delivering value for our customers, shareholders and all stakeholders.”

The net profit for KCB Group has risen from Ksh37.5 billion ($290.69 million) the prior year, with external subsidiaries contributing significantly though their share dropped from 35.1 percent in 2023 due to the rapid growth of KCB Kenya. Notably, the Trust Merchant Bank in the Democratic Republic of Congo posted a 28 percent profit increase, followed by Burundi at 23 percent and Tanzania at 20 percent.

Nevertheless, profits from KCB’s Ugandan and Rwandan operations saw declines of three percent and one percent respectively. The overall profit from subsidiaries outside KCB Kenya rose by 42 percent, amounting to Ksh19.6 billion ($151.03 million), while KCB Kenya itself reported the largest profit growth of 77 percent.

In light of this successful financial year, the board of directors has proposed a final dividend of Ksh1.5 ($0.01) per share, pending shareholder approval, culminating in a total distribution of Ksh9.6 billion ($74.41 million) for the full year following an interim payout of Ksh1.5 ($0.01) in September 2024.

KCB, recognized as the largest lender in East Africa by assets at Ksh2 trillion ($15.5 billion), had experienced a downturn in profits over four consecutive quarters, leading to the suspension of dividend payments in 2023, marking the first such event in 21 years. Mr. Russo, who assumed the role of CEO in May 2022, attributed the prior decline to much-needed restructuring within the bank.

The remarkable net profit surge to Ksh61.8 billion ($479.06 million) in 2024 stems from increased revenues from regional entities and optimized operational efficiencies. Joseph Kinyua, the group’s chairman, expressed optimism about future economic activities, highlighting the resilience of vital service sectors and expected improvements in credit growth and exports. He stated, “We are continually ring-fencing our business by preserving capital and containing costs for long-term sustainability.”

The group’s total income also saw a 24 percent rise to Ksh204.9 billion ($1.58 billion), fueled by higher earnings from customer loans and government securities. Net interest income grew by 28 percent, while non-funded income increased by 16.61 percent, bolstered by fees, commissions, and foreign exchange trading profits.

KCB Group operates across Kenya and several East African nations, including Uganda, Tanzania, Rwanda, Burundi, South Sudan, and the DRC, with an office in Ethiopia. The percentage of assets from subsidiaries outside KCB Kenya rose slightly to 34.9 percent in 2024, although their net loan contributions were marginally affected by currency fluctuations. Moreover, customer deposits fell by 18 percent to Ksh1.4 trillion ($10.85 billion) primarily due to the strengthening Kenya shilling and market shifts, while deposits from subsidiaries increased to 34.3 percent from 33.8 percent in 2023.

In conclusion, KCB Group has demonstrated notable financial resilience, with a significant increase in net profits and a return to dividend payments. The bank’s diversified regional operations contributed to a robust performance, particularly from the DRC, Burundi, and Tanzania, despite challenges in Uganda and Rwanda. The outlook remains positive as KCB continues to enhance its strategies for sustainable growth and shareholder value.

Original Source: www.zawya.com

About Marcus Chen

Marcus Chen has a rich background in multimedia journalism, having worked for several prominent news organizations across Asia and North America. His unique ability to bridge cultural gaps enables him to report on global issues with sensitivity and insight. He holds a Bachelor of Arts in Journalism from the University of California, Berkeley, and has reported from conflict zones, bringing forth stories that resonate with readers worldwide.

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