Kenya Commercial Bank (KCB) has recorded a 5% increase in net profit from 12.1 billion Kenyan Shillings in the first half of 2018, to 12.7 billion Kenyan Shillings in the first half of 2019.
The jump is attributed to a 5% rise in net interest income, as well as a 15% increase in non funded income.
The figure, which was released on the 15th Of August 2019, puts the Kenya Commercial Bank (KCB) ahead of its closest competitor; Equity Group which recorded a net profit of 11.92 billion Kenyan Shillings in the same period.
Following the announcement, the board for the Kenya Commercial Bank (KCB) has approved payment of an interim dividend of Sh1.00 per share. This will be paid in November 2019.
The Kenya Commercial Bank (KCB) is expected to focus more on its mobile platforms due to the fact that 96 percent of the bank’s transactions are done through mobile banking, online platforms, and agency banking.
The net interest income growth of 5% was however, below expectation due to the decline in loans’ yield. The bank’s average yield of loans declined to 11.4% compared to 12.4% in 2018.
The 15% non funded income growth was attributed to the increase in fees and commission income.
The loan loss provision rose by 266% from 828 million Kenyan Shillings to 3 billion Kenyan Shillings due to the adoption of IFRS 9.
Corporate loans and mortgage loans grew at 10 percent and 5 percent respectively, while retail loans grew at 12 per cent while corporate and mortgage grew at 10 per cent and five per cent respectively.
Interest on loans and advances to customers, increased to 479 billion Kenyan Shillings from 421 billion Kenyan Shillings.
The Central Bank of Kenya had during the same six month period, kept benchmark lending rates for the sector at nine percent meaning no commercial loan was priced higher than 13 percent.
In line with regulations by the Central Bank Of Kenya (CBK), more banks in Kenya, are expected to release their results on or before end of the month of August.
