KCB Group is betting on regional subsidiaries and the reorganisation of some of its business units to grow income in the remainder of the year.
This is after the lender posted a flat profit after tax of Sh9.75 billion in the three months to March.
KCB posted a net profit of Sh9.8 billion in a similar period a year earlier.
Its revenue in the three months to March increased by 26.9 per cent to Sh36.9 billion mainly driven by the non-funded income.
The lender linked this to customer transactions across the Group network and the consolidation of Trust Merchant Bank (TMB) - the Group's newest subsidiary in the Democratic Republic of Congo.
"The first quarter performance highlights the resilience of the business across the corporate and retail franchises," said Group Chief Executive Paul Russo.
"The regional businesses performed well, giving credence to the regional expansion strategy."
KCB said the contribution of Group businesses (excluding KCB Bank Kenya) to the overall profitability was up to 35 per cent from 17.2 per cent, adding that investments in regional businesses "continued to pay off."
"While the Group's growth in the past has been majorly driven by Kenya, its future hinges on becoming a significant regional player. We, therefore, continued to bolster our capacity to match the meaningful role that we seek to play and become an undisputed leader in the
region," said KCB Group Chairman Andrew Kairu in a statement.
"We are optimistic about improved performance in the remaining quarters of the year despite the tough environment that has impacted customers and the economy as a whole," he added.
During the period, the bank completed the reorganisation of its subsidiaries - KCB Capital Ltd and NBK's National Trustee and Investment Services Ltd (NTISL).
KCB Capital has been rebranded to KCB Investment Bank and will focus on offering wealth management, advisory services, brokerage services and the distribution of collective investment schemes with a focus on money market funds.
NTISL is now KCB Asset Management, and its core objects include the provision of fund management services, corporate trustee, pension management services and development of collective investment schemes and unit trusts.
The lender's costs increased by nearly half from the consolidation of TMB and expenditure to support additional revenues, eating into its bottom line.
During the period under review, the lender boosted provisions, which rose by 99 per cent, driven by increased credit risk and the impact of forex devaluation in Kenya.
