KCB results: Dividends rise in spite of flat earnings

Earnings before tax rose 10% from KShs. 26.5 billion; posted the same period last year, to KShs. 29.1 billion profit for the full year ending December 31, 2016. This was revealed by KCB Group CEO and MD, Joshua Oigara, at an investor conference on Thursday. The rise was largely attributed to a strong loan and deposit growth and improved operating efficiencies.

However, the net profit remained flat at 19.7 billion majorly due to a weaker earnings from its regional subsidiaries.  The net profit reported at the same time a year earlier was 19.6 billion.

Nearly all of its earnings in the period under review came from Kenya compared to the previous year when the bank earned Sh3.1 billion from the regional units.

“The contribution of the international business dropped to less than five percent as a result of the devaluation of the South Sudan Pound and accounting for the hyperinflationary environment in the country resulting in an overall negative impact on net monetary position,” KCB said in a statement Thursday.

The group’s total assets grew by 7% from KShs. 558B to KShs. 595.2B with Shareholder funds increasing to KShs. 96.6B, a 19% rise.

Its loan book grew 11.4 per cent to Sh385.7 billion, helping to raise total interest income 11.3 per cent to Sh62.8 billion.

Operating expenses increased 11.9 per cent to Sh40.3 billion despite an 11.8 percent reduction in loan loss provision to Sh3.8 billion.

KCB’s bad debt rose 35.5 per cent to Sh31.8 billion. This has been attributed to defaults by a few large corporate borrowers.

In his statement,  Mr. Oigara noted the continued growth of the contribution of the Non-funded incomes to KCB’s bottom-line. This he said has resulted from a continued investment in new technology-based financial solutions focused on enhancing the customer journey.

“The Bank is on a strong technology foundation that should drive the business stronger into the future. We are rolling out an elaborate fintech proposition this year that will significantly transform the way we interact with our customers. This will also enhance our capacity to innovate rapidly and quickly in our current environment,” said Mr. Oigara.

The bank declared a raise of dividend per share to Ksh 3 from last year’s Ksh 2. The new dividend will be paid on May 26 to shareholders on record as of April 24.



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