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KCB triples dividend as profit hits Sh34.2 billion

NEWS
By Patrick Alushula | Mar 17th 2022 | 2 min read
By Patrick Alushula | March 17th 2022
NEWS

L-R: KCB Chief Finance Officer Lawrence Kimathi, KCB Group Chief Executive Officer Joshua Oigara, KCB Group Chairman Andrew Wambari Kairu during 2021 full-year financial results. [Wilberforce Okwiri, Standard]

KCB Group has tripled its dividend payout to shareholders on the back of net profit rising 74.5 per cent to Sh34.2 billion.

The jump in net profit, for the financial year ended December 2021, was from Sh19.6 billion posted in the preceding similar period, helped by increased income, cost management and lower provisioning for loan defaults.

“We made significant progress in achieving our 2021 strategic targets which delivered a strong financial performance that was in line with gradual economic recovery across all markets,” said KCB Chief Executive Mr Joshua Oigara.

“The third and fourth quarters were the turning point with a pick-up in lending activity even as the Covid-19 pandemic continued to impact on economic activity.”

KCB board has recommended a final dividend of Sh2 per share which will amount to Sh6.43 billion to shareholders who will be in the lender’s records by April 25.

The final payout, when added to Sh3.21 billion paid last year will bring the total payout to Sh9.64 billion. KCB’s net interest income grew from Sh67.54 billion to Sh77.69 billion during the review period as non-interest income increased from Sh28.15 billion to Sh30.94 billion.

Operating expenses dropped from Sh60.82 billion to Sh69.97 billion, further supporting the growth in the bottom line.

The 15 per cent drop in operating expenses came in the period when provisioning for loan defaults reduced from Sh27.21 billion to Sh12.99 billion on the back of clearing Covid-19 economic hardships.

KCB said the 52 per cent decrease in provisioning for loan defaults was largely due to lower corporate and digital lending impairment charges given that much of Covid-19-related provisions were absorbed in 2020.

However, the non-performing loans ratio increased from 14.7 per cent to 16.5 per cent, signaling the longer-term effects of Covid-19.

 

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