The Kenya Commercial Bank Group has weathered the storm in the banking sector to post a net profit of Sh10.26 billion in the first six months of this year.
The results, released on Wednesday, reflect a marginal drop in profitability from the Sh10.28 billion posted last year.
The lender’s half-year profits veered from the traditional net interest income, which only grew by three per cent to Sh23.15 billion from Sh22.5 billion last year.
Income from fees and commissions went up 14 per cent to Sh7.21 billion from Sh6.3 billion in 2016 while forex income rose by three per cent to Sh2.65 billion from Sh2.57 billion.
“The banking sector continues to undergo numerous challenges and as a bank, our continuous innovation and customer-centric orientation ensures that we remain focused on acting as an enabler for progress to our customers,” commented KCB Group Chief Executive Joshua Oigara.
The lender saw non-performing loans rise from Sh32.9 billion in 2016 to Sh33.2 billion in the six months of this year, mainly from money owed by Kenya Airways and Nakumatt, both of which are insolvent and owe the lender a total of Sh31 billion.
KCB, the country's biggest lender by assets, has agreed to convert its Sh2 billion debt in Kenya Airways into equity, extending its tentacles into the aviation sector. The bank’s performance mirrors the market, whose growth has remained muted since the Government passed a law capping interest rates.
Banks have concentrated investments in Government paper, which has subsequently yielded lower rates due to oversupply in liquidity.