KCB Group Reports 49% Profit Surge, Tackles Rising Bad Loans

AFRICAN STOCKS AND FINANCENovember 22, 2024 at 9:38 AM UTC

TLDR

KCB Group Plc reports a 49% increase in net income for the nine months ending September, reaching 44.5 billion shillings ($344 million).
Non-performing loan ratio rises to 18.5% from 16.5%, indicating challenges with bad debt provisions.
KCB plans to sell National Bank of Kenya to Nigeria’s Access Bank pending Central Bank of Kenya approval.

KCB Group Plc, Kenya’s largest bank by assets, reported a 49% increase in net income for the nine months ending September, reaching 44.5 billion shillings ($344 million). However, the non-performing loan ratio rose to 18.5% from 16.5%, highlighting persistent challenges with bad debt provisions.

The bank plans to sell its loss-making National Bank of Kenya unit to Nigeria’s Access Bank, pending Central Bank of Kenya approval. Nigerian regulators have already cleared the deal, according to CFO Lawrence Kimathi.

Despite a tough operating environment across its markets, KCB remains the best-performing stock among Nairobi-listed banks, with a 78.8% gain year-to-date. CEO Paul Russo expressed optimism for a strong year-end, citing improving market conditions and customer support as key drivers.

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Key Takeaways

KCB’s robust profit growth showcases its resilience in a challenging economic climate, but rising non-performing loans signal ongoing credit risks. The pending sale of National Bank of Kenya reflects a strategic move to streamline operations and focus on profitability. As the best-performing bank stock in Nairobi, KCB’s performance underscores investor confidence, supported by its regional presence and adaptability in navigating tough market conditions. The coming months will test its ability to sustain growth while addressing asset quality concerns.

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