KCB Group has posted a 43% drop in net profit for the nine months that ended on 30th September 2020 to KSh 10.9 billion attributed to high loan provisions.
The latest results are a decline from KSh19.2 billion posted in the same period the year before.
KCB Group Plc after-tax profits for the 9 months ending Sept 2020 stood at KShs 10.9B, a 43% drop from KShs 19.2B recorded last year. Performance was largely impacted by increased provision on loans & advances due to increased risk of credit default associated with the pandemic pic.twitter.com/3pWgS93F61
— KCB Group (@KCBGroup) November 11, 2020
KCB Group’s loan provisions surged fro. KSh5.8 billion to KSh 20 billion due to the Covid-19 impact.
“This has been a challenging period for the business, staff, customers, and the economy. Our focus has been on keeping our staff and customers safe while at the same time giving business support to the communities we operate in as well as our customers,” said KCB Group CEO Joshua Oigara.
According to Genghis Capital, KCB Group’s digital strategy will be the key growth driver in the post-pandemic environment as key in driving efficiency levels (operating expenses before provisions down 0.2% y/y) which has been sustained below the 50.0% level for the past year (CTI at 46.3% from 48.8% in 3Q19).
However, “The operating environment has deteriorated substantially due to the unraveling pandemic and while business activity has improved from 2Q20, there is still high uncertainty on provisioning levels and post-restructuring performance of restructured loans (KES 105Bn restructured),” Genghis Capital notes in its KCB Group Plc (NSE: KCB) 3Q20 Earnings Note.