KCB profit up 6.1 per cent as bad loans rise

Institution falls behind Equity Bank, which reported Sh5.1 billion in net profit.

The Kenya Commercial Bank’s branch along Moi Avenue in Nairobi on June 3, 2014. PHOTO | SALATON NJAU | NATION MEDIA GROUP 

In Summary

• Net profit now stands at Sh4.63 billion.

By GEOFFREY IRUNGU
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East Africa’s largest commercial bank by assets KCB Group was hit by a Sh7 billion increase in gross non-performing loans (NPLs), even as it recorded a 6.1 per cent growth in net profit in the first quarter of the year compared to last year.

Provisioning for loan losses more than doubled to Sh1.34 billion, cutting into the company’s net profit that now stands at Sh4.63 billion in the quarter ending March 31, up from Sh4.36 billion in the same period last year.
KCB Group saw its deposits fall by nearly Sh1 billion, amid the industry talk about flight to safety by customers from small banks to big players after the fall of several financial institutions since last year.
Its loan book remained flat.
With the net profit standing at Sh4.63 billion the institution now falls behind Equity Bank, which reported Sh5.1 billion in net profit for the first three months of the year.
During the quarter, KCB’s dud assets or gross NPLs rose to Sh30.44 billion for the group from Sh23.5 billion last December. The increase arose mainly from the Kenyan unit whose NPLs now total Sh26.1 billion from Sh19.3 billion last December.
The deposits stood at Sh423.43 billion at the end of March, down from Sh424.39 billion in December.
The total loans and advances were flat at Sh345.94 billion as at the end of March compared to Sh345.97 billion in the quarter ended last December.
KCB Group was last month appointed the manager of Chase Bank, which collapsed on April 7, but re-opened its doors on April 27