KCB Group Reports 65% Profit Surge, Resumes Dividend Payments

KCB Group’s net profit surged 65% to Ksh61.8 billion ($479.06 million), driven by regional subsidiaries and increased revenue streams. The board has recommended a total dividend of Ksh3 per share, ending a freeze that spanned 2023. Notable profit growth was seen in the DRC, Burundi, and Tanzania despite declines in Uganda and Rwanda. Total income increased by 24%, supported by net interest and non-funded income improvements.

The KCB Group recently reported a remarkable 65 percent increase in its net profit for the year ending December 31, amounting to Ksh61.8 billion ($479.06 million). This growth is attributed to enhanced revenue from regional investments and increased earnings from loans, government securities, forex trading, and banking transactions, which facilitated the resumption of dividends that had been paused in 2023 to fortify capital buffers. Audited financial statements indicate that regional subsidiaries, excluding KCB Kenya, contributed 30.3 percent to the group’s profit, with most units, aside from those in Uganda and Rwanda, achieving double-digit growth.

Mr. Paul Russo, the Chief Executive Officer of KCB Group, remarked, “The strong performance illustrates our resolve over the past three years to build an organisation for the future that is anchored on delivering value for our customers, shareholders and all stakeholders.” For context, the group’s net profit increased to Ksh61.8 billion in 2024 from Ksh37.5 billion in the previous year, despite a decrease in contribution from regional subsidiaries. Notably, net profit from the Democratic Republic of Congo’s Trust Merchant Bank surged by 28 percent, while Burundi and Tanzania’s profits grew by 23 percent and 20 percent, respectively.

The board has proposed a final dividend payout of Ksh1.5 ($0.01) per share, totaling Ksh3 ($0.02) per share over the year, amounting to Ksh9.6 billion ($74.41 million), which follows an interim payout made in September 2024. KCB, recognized as the largest lender by assets in the region (Ksh2 trillion, $15.5 billion), had experienced four consecutive quarters of decreasing profits, leading to a pause in dividend payouts for 2023. Mr. Russo described last year’s drop in profitability as a necessary cleaning process initiated upon his appointment in May 2022.

Overall, the KCB Group displayed a total income growth of 24 percent to Ksh204.9 billion ($1.58 billion), driven by an increase in interest income from loans and securities, as well as growth in non-funded income from trade finance and forex trading. Net interest income rose 28 percent, while non-funded income increased by 16.61 percent. This positive trend is accompanied by a slight increase in asset contribution from subsidiaries outside Kenya. Despite an 18 percent drop in customer deposits largely due to the appreciation of the Kenyan shilling, the proportional deposits in subsidiaries grew, reflecting regional investment strengths.

In summary, KCB Group’s financial performance for the year indicates a robust recovery with a 65 percent rise in net profit driven by regional investment growth and improved revenues. Despite challenges such as a decline in customer deposits and contributions from certain regional subsidiaries, the overall financial health and strategic initiatives taken by the KCB Group signal a promising outlook for future profitability. The return to dividend payouts marks a significant milestone for the group after a challenging 2023.

Original Source: www.zawya.com