Kenya Commercial Bank (KCB) Group Plc has reported a 7.5% pretax profit for the financial year 2019 to KSh 36.73 billion.
As a result, the group reported a five percent growth in net profit to KSh25.2 billion for the year ended December 31 on improved loan book and digital efficiency.
KCB Group CEO and MD, Joshua Oigara said the business remained resilient despite the challenging economic conditions witnessed in the various markets and the wider global economy.
“The East African region continued to face various downside risks that ranged from adverse weather patterns to stress from currency fluctuations and the pressure from oil imports” he said while releasing the results in Nairobi on Thursday.
“All business lines were strong on both funded and non-funded income as cost control, operational efficiency and driving excellent customer experience remained a top priority,” said Mr. Oigara.
Earnings per share at the group in Uganda, Tanzania, Rwanda, Burundi and South Sudan, increased to 8.11 shillings during the period, from 7.83 shillings a year earlier.
Total dividend per share was Ksh 3.50, unchanged from the previous year, KCB said.
Going forward, the business outlook for the year remains positive, with significant gains expected following the removal of the cap on interest rates in November 2019.
“The banking sector is seeing heightened regulatory scrutiny, increased competition, amplified adoption of digital banking, and shifting economic environment across the East African region. In the face of these shifts, we have positioned ourselves and tapped into opportunities presented as we navigate past the challenges,” said the KCB Group Chairman, Andrew Kairu.
“The bank’s efficiency levels have improved gradually over the last 2 years as the bank embraces its digital strategy. The key growth driver for the bank will no doubt be its ability to leverage effectively on its digital platform to drive both efficiency levels and Non-Interest Revenue.
While the acquisition of NBK has had an impact on operating metrics as expected in our KCB acquires NBK note, we expect the commendable management’s efforts in addressing the asset quality of NBK to continue bearing fruit in subsequent quarters.
We maintain our long-term BUY recommendation on KCB with a fair value estimate of KES 62.25, representing a potential upside of 27.9%,” commentary from Genghis Capital.