Connect with us

Business & Money

KCB Group’s Net Profit Jumps 69% in Q1 2024, Reclaiming Top spot in East Africa.

A key enabler of KCB Bank’s stellar performance was a three-year strategy hinged on digital leadership, prioritizing adherence to market standards and regulatory demands to strengthen operations.

Published

on

The Kenyan lender achieved this historic quarterly milestone with significant revenue growth across its network, closing Q1 2024 with a balance sheet of KShs. 2.0 trillion, up from KShs. 1.6 trillion the previous year.

:Driven by  Kenya Commercial Bank boosting customer satisfaction and reducing friction by prioritizing automation, expanding self-serve channels, and streamlining loan applications.

KCB Group PLC’s net profit soared 69% to KShs. 16.5 billion in Q1 2024 from KShs. 9.8 billion, reclaiming its title as East Africa’s most profitable bank and solidifying its status as the largest lender by assets.

The Kenyan lender achieved this historic quarterly milestone with significant revenue growth across its network, closing Q1 2024 with a balance sheet of KShs. 2.0 trillion, up from KShs. 1.6 trillion the previous year.

The total revenues increased by 31.6% to KShs. 48.5 billion, mainly due to growth in both funded and non-funded income. Non-funded income, which accounted for 36% of total revenues, was boosted by higher transaction volumes, increased customer confidence, and the adoption of digital banking and alternative channels.

CEO Paul Russo stated, “Despite challenging conditions across the region, we achieved strong revenue performance by maintaining prudent credit, liquidity, cost, and risk management. Consumer deposits continued to grow, reflecting client confidence in our brand. Our investments in digital and payment capabilities, along with our regional expansion strategy, delivered impressive results.”

A key enabler of KCB Bank’s stellar performance was a three-year strategy hinged on digital leadership, prioritizing adherence to market standards and regulatory demands to strengthen operations.

 In April, Business Daily reported that the bank plans to hire 400 new workers across its regional operations, in line with the group’s investment in “digital leadership.

The latest Kenya Bankers Association customer satisfaction survey reveals that 45.7% of customers prefer fully automated or self-service platforms, including mobile, internet, and chatbots, for their banking services.

He added, “We leveraged group capabilities through facility syndication and centres of excellence to enhance operational efficiency. Our shared services model prioritized automation, expanding self-serve channels, and streamlining loan applications, boosting customer satisfaction and reducing friction. Looking ahead, we are optimistic about our prospects in all markets. We aim to leverage our strong relationships and brand to drive growth, guided by our 2024-2026 strategy: Transforming Today Together.”

KCB Group also operates in the Democratic Republic of Congo (CBK), Tanzania, Rwanda, South Sudan, Uganda, and Burundi.

In anticipation of Ethiopia’s financial services liberalization, KCB is eyeing potential acquisitions and conducting due diligence on two banks, revealed CEO Paul Russo at the Africa CEO Forum held in Kigali, Rwanda, on May 16-17.

Net interest income surged to 31.06 billion shillings from 22.06 billion shillings. Gross loans grew by 12.2% to 1.13 trillion shillings, with loan-loss provisions rising to 6.3 billion shillings from 4.12 billion shillings due to downgrades in Kenya and the impact of foreign currency translation. Total assets increased to 2 trillion shillings from 1.63 trillion shillings year-over-year. In March, KCB agreed to sell its Kenyan unit, National Bank, to Nigeria’s Access Group.

Net interest income surged to 31.06 billion shillings from 22.06 billion shillings. Gross loans grew by 12.2% to 1.13 trillion shillings, with loan-loss provisions rising to 6.3 billion shillings from 4.12 billion shillings due to downgrades in Kenya and the impact of foreign currency translation. Total assets increased to 2 trillion shillings from 1.63 trillion shillings year-over-year. In March, KCB agreed to sell its Kenyan unit, the National Bank, to Nigeria’s Access Group.

Keywords:KCB Group profit growth:Digital banking adoption:East Africa’s largest lender:KCB regional expansion:Net interest income surge

Charles Wachira, Managing Editor of businessworld, has disproportionately worked as a foreign correspondent in Nairobi, Kenya. Formerly an East Africa correspondent with bloomberg, covering the business beat he has since been published by a legion of other authoritative global news platforms including Global Finance Magazine, Toward Freedom, Earth Island Journal, and Dialogue. earth and so on. He is also a co-author of, Success to Significance, a biography of pre-eminent global industrialist and renowned philanthropist Dr. Manu Chandaraia. He’s an alumnus of the University of Nairobi and Nairobi School.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business & Money

Ethiopia Attracts $53.5 Million in Q1 Investments, Creates 8,700 Jobs

Published

on

ethipia economy

: Ethiopia attracts $53.5M in Q1 investments, creating 8,700 jobs. Growth driven
by reforms, with a focus on service and manufacturing sectors.

The Addis Ababa Investment Commission (AAIC) announced a promising start to the
2023/24 fiscal year, with 612 investors registering a combined capital of Birr 2.93 billion
($53.5 million) in the first quarter.

This reflects a 13% growth compared to the same period last year, signalling sustained
investor confidence despite economic challenges.

Speaking at a press briefing on November 30, AAIC’s Director of Communication,
Meseret Woldemariam, credited the growth to policy reforms and enhanced investor
facilitation.

“Our efforts to streamline investment processes and resolve bottlenecks are yielding
results. We remain committed to ensuring investors thrive in Addis Ababa,” she said.

SECTORIAL CONTRIBUTIONS

The majority of the newly licensed investors are in the service and manufacturing
sectors. The service sector includes hotels, tourism, and IT ventures, while the manufacturing
investments span electrical products, steel, wood, and textiles.

These investments have generated 8,707 jobs, comprising 770 permanent and 490
temporary positions created by newly licensed entities.

The AAIC has also initiated field monitoring visits to ensure operational readiness. “Our
team works closely with new investors to address challenges promptly, enabling faster
project rollout,” Meseret added.

CHALLENGES AND REFORMS

Investors continue to face hurdles such as foreign currency shortages and workspace
availability. However, the commission highlighted progress due to macroeconomic reforms,
particularly improving foreign currency access.

“We are actively collaborating with the Mayor’s office to address workspace issues
through professional support in rental solutions and operational guidance,” Meseret
explained.

Recent reforms in the National Bank of Ethiopia’s foreign exchange policy have also
been pivotal. In October, the central bank announced a 30% increase in forex allocation to priority sectors, a move welcomed by stakeholders.

EXPANSION PLANS AND PROJECTIONS

The AAIC aims to capitalise on the momentum, targeting Birr 15 billion ($274 million) in
investments by the end of the fiscal year. A new digital investment portal, launched in November, promises to reduce registration times by 40% and improve transparency.

“We are confident these initiatives will not only attract more investors but also deepen
the trust of existing ones,” Meseret concluded.

INVESTOR SENTIMENT

Prominent business leader Ahmed Yusuf, who recently launched a $3 million IT hub in
Addis Ababa, praised the commission’s efforts.

“The improvements in investor services and forex allocation are encouraging. We hope
to see more streamlined processes for licensing and operations,” he remarked.

As Ethiopia seeks to position itself as a regional investment hub, sustained efforts in
addressing investor concerns and enhancing infrastructure will be critical.

Continue Reading

Business & Money

Ethiopia Eyes December Debt Restructuring After IMF Review

Published

on


: Ethiopia’s December IMF review may unlock long-awaited debt restructuring,
crucial for economic reforms and stalled projects like the Koysha Hydroelectric
Dam.

Ethiopia’s much-anticipated debt restructuring prospects could gain clarity this
December, as the country awaits the second review under its four-year International
Monetary Fund (IMF) program.

The Extended Credit Facility (ECF), launched in August 2023, remains central to
Ethiopia’s economic reform and debt relief efforts.

Progress Toward Debt Treatment

Last week, Ethiopian authorities reached a staff-level agreement with the IMF tied to the
second review. A comprehensive report on this review is set for release in December, a month many stakeholders, including the National Bank of Ethiopia (NBE), view as pivotal for
advancing debt treatment plans.

“Debt restructuring stands at the centre of our reform agenda. With the report’s release,
we expect rescheduling talks to gain momentum,” said Habtamu Workneh, Director of
External Economic Analysis & International Relations at the NBE.

He added that discussions are focusing primarily on extending maturity dates for Ethiopia’s debts.

IMF Support and Engagements with Creditors

The IMF has provided Ethiopia with USD 2.5 billion under its current fiscal program,
offering critical support to the country’s macroeconomic stabilisation efforts.
In parallel, Ethiopian authorities have engaged with Eurobond holders and the Official
Creditors Committee (OCC).

A debt restructuring proposal was submitted to Eurobond holders in July 2024, following
key discussions in December 2023 and May 2024.

Additionally, a global investor update held on October 1, 2024, highlighted the nation’s
ongoing economic challenges and progress in creditor negotiations.

Shifting Debt Landscape

The government has reported improvements in its debt profile. Planning and Development Minister Fitsum Assefa (PhD) announced that Ethiopia had ceased relying on commercial loans and direct borrowing from the central bank.

She noted a significant drop in the external debt-to-GDP ratio to 13.7 per cent, though
the IMF’s Debt Sustainability Analysis, published in July 2024, pegged the ratio at 18
per cent as of June 2023.

External debt accounts for 45 per cent of Ethiopia’s total public and publicly guaranteed
debt, the report stated.

Financing Challenges Persist

Despite these reforms, Ethiopia’s financing challenges remain acute.
The government is seeking nearly USD 1 billion to complete the Koysha Hydroelectric
Dam project, which has stalled at two-thirds completion due to funding shortfalls.

The project is a critical component of Ethiopia’s development strategy, but its delays
underscore the broader fiscal pressures the country faces.

Expert Views on Economic Outlook

While Ethiopian officials are optimistic about the December review as a turning point,
analysts caution that real progress hinges on creditor consensus and the government’s
ability to implement reforms.

Critics have also raised concerns about inflated GDP growth figures, which they argue
may distort Ethiopia’s true debt sustainability.

Looking Ahead

The IMF review, coupled with Ethiopia’s active engagement with creditors, could mark a
a significant step forward in its quest for debt relief.

December will likely be a defining month for the country’s economic future, with broader
implications for its ability to attract investment and complete critical infrastructure
projects.

Continue Reading

Business & Money

KCB Group Surpasses Equity with US$ 342.31 Million Nine-Month Profit

Published

on

kcb equity bank


: KCB Group reports Sh44.5B ( US$ 342.31) nine-month profit, outpacing
Equity Bank. Learn about its 49% growth, challenges, and stock performance this
year.

KCB Group Plc has outperformed Equity Bank to cement its position as Kenya’s leading
lender, posting a net profit of Sh44.5 billion for the nine months ending September

This represents a 49% year-on-year growth, surpassing Equity Bank’s Sh37.5
billion profit during the same period.

Profit Growth Driven by Core Business Performance

The remarkable profit growth was fueled by higher earnings from both interest and non-
interest income streams. KCB’s diverse revenue base has been pivotal in maintaining
its dominance in the competitive banking sector.

Non-Performing Loans a Key Concern

Despite the impressive profit growth, KCB’s non-performing loan (NPL) ratio rose to
18.5%, compared to 16.5% last year. This increase highlights persistent challenges in
managing credit risk, with Chief Financial Officer Lawrence Kimathi acknowledging it as
a “pain point” for the bank.

KCB Stock Outshines Peers on NSE

KCB’s strong financial performance has translated into exceptional stock market results.
The bank’s stock has risen 78.8% year-to-date, making it the best-performing banking
stock on the Nairobi Securities Exchange (NSE).

Plans to Sell National Bank of Kenya

Earlier this year, KCB announced plans to sell its struggling subsidiary, National Bank of
Kenya (NBK), to Nigeria’s Access Bank. While Nigerian regulators have approved the
deal, it is still awaiting clearance from Kenya’s Central Bank. The sale aims to
streamline KCB’s operations and address losses at NBK.

CEO Paul Russo Optimistic About Year-End Performance

“The journey has not been without its hurdles, but our ability to walk alongside our
customers has driven our success,” said KCB CEO Paul Russo. He expressed

confidence in closing the year on a high note, leveraging improving economic conditions
across the region.

Key Figures at a Glance

● Net Profit: Sh44.5 billion (+49%)
● Non-Performing Loan Ratio: 18.5% (up from 16.5%)
● Stock Performance: +78.8% year-to-date

KCB’s strong performance underscores its resilience in navigating challenges and its
commitment to sustaining growth in Kenya’s banking sector.

Continue Reading

Trending