KCB Group posted a net profit of Sh16.09 billion in the first quarter ended March 2025, nearly matching last year’s performance during the same period as non-interest income retreated and operating expenses rose.
The latest net profit compares with Sh16.06 billion net earnings in the first quarter of 2024 and was supported by an 8.6 percent rise in net interest income to Sh33.72 billion from Sh31.06 billion.
Non-interest income however dropped by 9.7 percent to Sh15.72 billion from Sh17.42 billion, while operating expenses rose by 3.4 percent to Sh28.26 billion, leading to the flat bottom-line.
“It is notable that we were able to match the 2024 quarter one performance, which was impressive by all standards. The group was resilient, supported by new business lines, deepening of digital channels and innovative customer value propositions,” said Paul Russo, chief executive at KCB Group.
“As we steer the remainder of the year, our focus is on leveraging the group’s scale, capabilities, people and partners, to deepen relationships and financial inclusion. We will continue to harness technology to enhance banking services and drive relevant products and services that contribute to economic growth, sustainability, and shareholder value.”
The performance is coming in an environment of falling interest rates on loans in line with sustained decline in central bank rate.
Returns on government paper have also been declining even as foreign exchange income also softened in an environment of reduced volatility on the shillings’ exchange rate.
The review period saw net profit for the group’s largest subsidiary, KCB Bank Kenya, retreat to Sh11.07 billion from Sh11.17 billion. The net profit of National Bank of Kenya, which is in the process of being disposed of to Nigeria's Access Bank, fell by 47.3 percent to Sh234.2 million from Sh444.2 million.
KCB said subsidiaries outside Kenya, including Tanzania, Uganda, Rwanda, Burundi, and the Democratic Republic of Congo, accounted for 32 percent of the Sh21.18 billion pre-tax group profit.
The group cut loan loss provisions to Sh5.6 billion from Sh6.32 billion, which was attributed to aggressive non-performing loans (NPL) monitoring strategy that included special focus on accounts with persistent defaults or at risk of transitioning to NPL status.
KCB says it has also tightened collateral checks and successfully rehabilitated key NPL exposures across the subsidiaries.
The group’s stock of gross NPLs closed the period at Sh233.29 billion from Sh205.32 billion while the NPL ratio rose to 19.3 percent from 18.2 percent, reflecting the challenging economic conditions in different sectors across the markets.
“The environment is expected to be even tougher this year with all the headwinds streaming from global trade tariff wars to shifting geopolitics in the East region. KCB Group remains dedicated to ensuring long-term sustainability and shared value for all stakeholders,” said Joseph Kinyua, chairman at KCB Group.
