KCB profit dips to Sh4.5 billion

 

Kenya Commercial Bank (KCB) Group’s net profit for quarter one of this year has dropped to Sh4.5 billion.

The 1.9 per cent decline from Sh4.6 billion posted in the same period last year came as interest rates, a tough economic environment and hyperinflation in Sudan started taking toll on Kenya’s largest lender by asset base. The drop in profitability came despite a 14 per cent increase in the uptake of loans.

The group’s non-interest income rose 20.3 per cent to Sh5.6 billion, up from Sh4.6 billion in the first quarter of last year, underscoring the growing importance of income derived from alternative revenue channels.

Challenging environment

Last year, the bank saw its net profit grow by 0.5 per cent in its full-year earnings to Sh19.72 billion, the slowest growth in seven years.

Group Chief Executive Joshua Oigara said the effects of the law capping interest rates resulted in an interest income dip of 12 per cent during the quarter under review to Sh14.1 billion, down from Sh16.0 billion last year.

“We have witnessed an increasingly challenging operating environment across all markets. In Kenya, the interest rate caps have made it difficult to price for risk,” he said.