KCB Group Plc reported a net profit of Kshs 18.04 billion for the nine months to September 30, 2018, representing a 20% growth over same period last year when it posted Ksh 15.08 billion net profit.
According to the lender, the improved performance was primarily driven by robust cost management and growth in net interest income.
Total operating income was up by 2% to close at KSh 54.2 billion with an improved show from non-interest income which accounted for 33 % of the group’s income.
Non-branch transactions continued to grow and now stand at 87% of total volumes, compared to 13% handled at the branches.
Agency banking transactions grew by 74%, mobile banking was up by 34%, with ATM and point of sale transactions increasing by 36% and 16% respectively.
The group saw total operating expenses decline by KShs 2.1 billion driven by lower staff costs and loan loss provisioning.
“Our focus on technology driven growth continues to deliver both client satisfaction and efficiencies while keeping costs under control and diversifying the income streams,” said KCB Group CEO and MD Joshua Oigara when announcing the results.
The group’s balance sheet improved 6% to Kshs 684.2 billion from Kshs 643.8 billion in 2017. Deposits grew by a similar margin to Kshs 526.8 billion from Kshs 496.3 billion, an indication of the value customers attach to the Bank, supporting the healthy liquidity position of 33.7%.
Net loans and advances were up 4% to KSh 435.3 billion from KShs 419.5 billion while long term funding stood at KSh 20.7 billion from the previous period’s KSh 14.4 billion.
In the first quarter, KCB obtained a US$100 million Line of Credit (LOC) from the African Development Bank (AfDB) to be used for on-lending to corporate businesses and Small and Medium Enterprises (SMEs).
The asset quality improved for the second straight quarter with NPL ratio closing at 7.5% and post IFRS 9 implementation coverage ratio increasing from 41.5% to 80.8%.
For the nine months, KCB also maintained a steady capital base—within both internal and regulatory limits— central to business growth in the coming years.
The group’s core capital as a proportion of its total risk weighted assets closed the period at 16.3% against the Central Bank of Kenya (CBK) statutory minimum of 10.5%.
Total capital to risk-weighted assets stood at 17.8% against a regulatory target of 14.5%.