KCB posts 20pc profit fall

By Victor MUJIDU

KCB Group Wednesday reported a 20 percent net profit drop in the six months ended June – a drop the lender attributed to staff restructuring costs and mounting loan defaults.

Net profit retreated to Sh15.5 billion from Sh19.5 billion posted in a similar period last year. The Group’s revenue grew by 22.2 percent to Sh73.1 billion in its previous postings.

KCB’s operating expenses also climebd by 60 percent to Sh50.61 billion in the period with non-performing loans (NPLs) rising to Sh10.2 billion from Sh4.32 billion previously. The rise in NPLs provisions, added to a 24 percent rise in staff costs to Sh17.5 billion and a 79.8 percent jump in other operating expenses to Sh17.1 billion added to the spike in the operating costs.

“Profitability was under pressure in the first half from increased funding costs on higher market deposit rates, prudent provisioning on legacy credit facilities, and provisions for legacy legal claims at NBK,” said the lender CEO Paul Russo.

“Looking ahead, noting the actions we have taken and with significantly improved liquidity, business focus is on accelerated performance in the second half of the year while supporting the distressed customers.”

KCB’s net interest income grew 12.1 percent to Sh45.5 billion as the loan book expanded by 32.3 percent to Sh964 billion.