KCB net profit hits Sh10.5 billion on higher interest income

KCB has reported a 14 per cent rise in half year 2016 net profit to Sh10.5 billion on the back of higher interest income from customer loans.

The bank’s net interest income rose by 16 per cent to Sh22.5 billion in the six-month period on higher interest rates in the market coupled with KCB’s loan book expanding by Sh27 billion to Sh347.4 billion (8.3 per cent).

KCB’s was able keep a lid on operating expenses during the period, reporting a small 1.7 per cent increase to Sh17.8 billion from the 17.5 billion reported in the first six months of 2015.

The bank was however unable to grow its non-funded income, which fell by 7.7 per cent to Sh10.4 billion due to lower fees, commissions and foreign exchange trading income.

Non-performing loans (NPLs) also remain a concern for the lender, growing by 36 per cent during the six month period to Sh32.9 billion.

The bank therefore has increased its loan loss provision by 51 per cent from Sh1.37 billion to Sh2.07 billion in the past three months alone.

In its regional subsidiaries, KCB said that the Uganda, Tanzania and Rwanda were stable in the period and turned in a profit, but there were concerns in South Sudan and Burundi due political instability.