KCB Group (KCB) Q2 2024 earnings summary

Executive summary

• Profit after tax for H1 rose 86% year-over-year to KShs. 29.9B, up from KShs. 16.1B, driven by strong revenue growth and balance sheet expansion.

• Balance sheet expanded 6% to KShs. 1.98T, maintaining KCB as East Africa's largest bank by assets and profitability.

• Subsidiaries (excluding KCB Bank Kenya) contributed 37.8% of pretax profits and 34.4% of total assets, highlighting benefits of regional diversification.

• Interim dividend of KShs. 1.50 per share (KShs. 4.8B total) recommended, marking the largest interim payout in KCB's history.

Financial highlights

• Total assets grew 6% to KShs. 1.98T, supported by customer deposits at KShs. 1.49T.

• Net loans & advances increased 7% to KShs. 1.03T, reflecting expanded lending.

• Net interest income rose 35% and non-funded income grew 21%, driven by digital banking, FX trading, and TMB subsidiary.

• Provisions increased 20% due to NPL downgrades, with NPL ratio at 18.5% and regulatory coverage at 104.3%.

• Costs rose 9.6% to KShs. 44.3B, but cost-to-income ratio improved to 46.8% from 55.3%.

Outlook and guidance

• Management anticipates a stronger H2, leveraging the Transforming Today Together strategy and expected economic turnaround.

• Focus remains on cost optimization and supporting customers through challenging environments.