KCB Group profit drops to Sh10.9 billion

KCB Group Chief Executive Officer Joshua Oigara (Photo: File)

NAIROBI, KENYA: KCB Group has recorded a drop in its profit after tax outlining the impact of Covid-19 pandemic on its business.

The lender’s after-tax profits for the nine months ending September 2020 stood at Sh10.9billion, 43 per cent lower than the Sh19.2billion recorded last year.

The performance was largely impacted by the increased provision on loans and advances in the wake of the increased risk of credit default associated with the COVID 19 pandemic.

“This has been a challenging period for the business, staff, our customers, and the economy. Our focus has been on keeping our staff and customers safe while at the same time giving business support to the communities we operate in as well as our customers. The pandemic has had a deep socio-economic impact and hence our decision to stand with our stakeholders,” said KCB Group CEO and MD Joshua Oigara.

For the period under review, the Bank restructured customer facilities worth Sh105 billion.

According to the financials released on Wednesday, total income was up 16 per cent to stand at Sh69.1 billion, compared with Sh59.7billion reported in September 2019.

The contraction in economic activity continued to hurt credit quality across segments.

The non-performing loans (NPLs) book rose to Sh97 billion up from Sh42.6 billion in 2019. The ratio of NPLs to total loan book increased to 15.2 per cent from 8.3 per cent in 2019, mainly due to the consolidation of NBK and COVID-19 related downgrades.

“While the pandemic is far from over and likely to continue into the next year, further straining the business and economy, we are projecting some recovery as the East Africa region finds some stability in living with the effects of the virus. We will continue to support our customers through the crisis and enhance initiatives geared towards ring-fencing the business. Our approach is conserving cash and managing cost,” said Oigara.