KCB Group reported a 43 percent decline in profit through the first nine months of the year 2020. The lender’s profit in the period stood at Ksh.10.9 billion from Ksh.19.2 billion last year.
The significant earnings slide is heavily attributable to the bank’s increased cover for potential loan defaults associated with riskier customer borrowing profiles under the COVID-19 pandemic.
Many KCB customers have failed to pay back their loans. This results from the poor economy caused by the pandemic. We remain hopeful for economic improvement after the pandemic ends.
The loan provisioning costs jumped by three and a half times to Ksh.20 billion from Ksh.5.8 billion last year. This rose the bank’s total operating costs in the period rose by 149 percent to Ksh.67.4 billion. Similarly, KCB Gross non-performing loans (NPLS) soared by twofold to Ksh.97 billion from Ksh.42.6 billion last year.
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The pandemic resulted in a deep socio-economic impact and hence drafted a decision to stand with stakeholders. KCB Group CEO Joshua. Oigara says about it. ”This has been a challenging period for the business, staff, our customers and the economy. Furthermore, our focus has been on Keeping our staff and customers safe and giving business support to the communities. We operate in as well as our customers.” He added.
The bank’s operating income grew by 15.7 percent to Ksh.69.1 billion on greater interest income. However, operations remained solid in the period.KCB’s non-interest funded income stream remained flat at Ksh.21 billion. Bank’s net interest income hit Ksh.47.9 billion from Ksh.38.7 billion.
Further, the lender marked growth in its balance sheet. It edged it closer to its Ksh.1 trillion asset base goal as total assets moved to Ksh.972 billion.KCB’s profit slide shrunk earnings per share (EPS) to Ksh.4.52 from Ksh.8.33.Follow us in social media: