KCB posts Sh5bn net profits in 3 months

KCB posts Sh5bn net profits in 3 months

COLLOH-MZII RELOADED

COLLOH-MZII RELOADED

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KCB Group posted a 14.1 per cent net profit rise in the first quarter ended March buoyed by increased lending.

Kenya’s biggest bank said it had made Sh5.1 billion net profit in the review period compared to Sh4.5 billion a year earlier, riding on a 5.8 per cent loan book growth that raised interest income 11 per cent to Sh15.6 billion.

Investment in government bonds and T-bills rose 1.5 per cent to Sh94.6 billion.

READ: Grain miller sues KCB over Sh600m loan charges

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KCB also benefited from lower loan loss provision of Sh600.2 million, down from Sh958.1 million in the same quarter last year despite a 36.1 per cent surge in gross defaults to Sh43.7 billion.

Non-interest income was flat at Sh5.5 billion, an outcome that the company attributed to reduced forex trading in South Sudan.

KCB is the second bank to report its first quarter results that capture the impact of the more conservative accounting rules, dubbed IFRS 9, which came into force at the beginning of the year and were expected to raise provisions for bad debt through anticipation of defaults.

Stanbic Bank Kenya, the local banking unit of Stanbic Holdings, also announced a near-doubling of net profit to Sh1.9 billion in the same period on the back of higher non-interest income and lower loan loss provision.

KCB’s ratio of total capital to total risk weighted assets dropped by 1.3 percentage points in the review period as provisions for default started to eat into its capital in line with the stricter accounting rules.

“Total capital adequacy ratio dropped by 130 basis points largely driven by the impact of the adoption of the IFRS 9, which came into effect from January 2018,” KCB said in a statement.

The move left the ratio above the minimum requirement of 14.5 per cent by 0.8 percentage point, the thinnest buffer it has recorded in recent times.

KCB chief executive Joshua Oigara, however, gave a positive guidance for the full year, which he pegged on expected improvement in economic conditions.

“The outlook for the year is favourable with an expected improvement in economic conditions leading to a pickup in investments across the East African region,” Mr Oigara said. “The business remains strong and our portfolio mix gives us an opportunity to tap into this recovery.”

KCB said its long term debt fell five per cent to Sh22.5 billion. Customer deposits grew 8.6 per cent to Sh496.3 billion, a move that saw interest expenses rise 12.5 per cent to Sh4.2 billion.

Operating expenses rose 1.7 per cent to Sh9.4 billion. The lender also deferred taxes amounting to Sh786.4 million in the quarter under review.

Kenyan banks will take a full hit from provisions for new loans issued in 2019 and beyond after the Central Bank of Kenya (CBK) refined its capital waiver rules that has mitigated the impact of IFRS9 in the short term.

The banking sector regulator says incremental provisions –limited to good loans outstanding as of December 31, 2017 and those issued this year— may be added back to earnings for purposes of computing core capital.

“All provisions under the expected credit loss (ECL) model for facilities/loans issued after 2018 shall not be added back for purposes of computing regulatory capital,” the CBK said in a circular.
 
How much Taxpayer money will be diverted to pay loans and intrests borrowed from KCB? I think that is a good point to start with 😀
 
Mkikuyu- Akili timamu said:
How much Taxpayer money will be diverted to pay loans and intrests borrowed from KCB? I think that is a good point to start with 😀
Click to expand...

Diverted??
The point of the national budget is to state how much goes to salaries, recurrent expenditure, loan repayment, development etc.
If KCB is owed any money, it will be payed just like the others.
I don't know why you're trying to make it sound like a bad thing.
 
kennedy0000 said:
Diverted??
The point of the national budget is to state how much goes to salaries, recurrent expenditure, loan repayment, development etc.
If KCB is owed any money, it will be payed just like the others.
I don't know why you're trying to make it sound like a bad thing.
Click to expand...
Banks are there to trade with the private sector not Govt. A banking industry that relies 60% of its loanbook on giving consessional loans to gvt at 13% is a Taxpayer Milking Machine. Look at America, it has 101% Debt to GDP, but who owns their debt? american banks? Nope. Chinese banks! Look at Japan, it has 250% debt to GDP, Who owns their debt? Japanese pensioners and retirement benefits companies..You cannot understand monetary policy, unless you have passed through an economics class, and its showing even with Uhuru's populist rate capping that IMF has now said it must be repealed!
 
Mkikuyu- Akili timamu said:
Banks are there to trade with the private sector not Govt. A banking industry that relies 60% of its loanbook on giving consessional loans to gvt at 13% is a Taxpayer Milking Machine. Look at America, it has 101% Debt to GDP, but who owns their debt? american banks? Nope. Chinese banks! Look at Japan, it has 250% debt to GDP, Who owns their debt? Japanese pensioners and retirement benefits companies..You cannot understand monetary policy, unless you have passed through an economics class, and its showing even with Uhuru's populist rate capping that IMF has now said it must be repealed!
Click to expand...

You are the king of guesswork. Where did you pull the 60% figures from?
Even with the rate cap, Kenyan banks lend to more private individuals than any other country in the region.
More Kenyans have access to loans than anyone else in EAC.
And every government has both internal and external borrowing to finance its budget. Here in Kenya, external creditors are owed more than the internal ones.
And by creditors not only banks. But also individuals buying bonds, treasury bills etc. eg. the Eurobond.
Even a simple Kenyan can buy a government bond for abou 12% return a year.

If your banking industry has underperformed, wacha kutafutie ya kenya matope.
 
kennedy0000 said:
You are the king of guesswork. Where did you pull the 60% figures from?
Even with the rate cap, Kenyan banks lend to more private individuals than any other country in the region.
More Kenyans have access to loans than anyone else in EAC.
And every government has both internal and external borrowing to finance its budget. Here in Kenya, external creditors are owed more than the internal ones.
And by creditors not only banks. But also individuals buying bonds, treasury bills etc. eg. the Eurobond.
Even a simple Kenyan can buy a government bond for abou 12% return a year.

If your banking industry has underperformed, wacha kutafutie ya kenya matope.
Click to expand...
You have no idea of the inner workings of a monetary policy, heck you dont even know what is a monetary policy or how it affects the economy. You are the kind of person who would print money and declare every one a Billionare, the same kind of useless brain that led uhuru to believe rate cap will make credit accessible to private borrowers. Zero brain
 
Mkikuyu- Akili timamu said:
You have no idea of the inner workings of a monetary policy, heck you dont even know what is a monetary policy or how it affects the economy. You are the kind of person who would print money and declare every one a Billionare, the same kind of useless brain that led uhuru to believe rate cap will make credit accessible to private borrowers. Zero brain
Click to expand...

There is no problem with the rate cap. And even with it, banks have continued to make huge profits.
The issue is the huge banking cartel. Banks have ganged up to deny many Kenyans loans, then blame the rate cap.
They want to be allowed to operate under the previous environment to continue making crazy profits.
This is nothing but blackmail.

By the way many countries have interest rate caps, even South Africa.
 
huwa nawaambia hawa watu hawajui biashara....the main reason is laziness..none of these niggas has that Go-getter mentality that kenyans usually have...Darisalam watu wanapenda kupiga story tu, small talk na salamu..mtu akienda kazi anasalimiwa na watu karibu mia moja..by the time anafika kazini siku imeisha...all this is a product of ujamaa system which i think was good only for peace and unity but terrible for business...
 
kennedy0000 said:
There is no problem with the rate cap. And even with it, banks have continued to make huge profits.
The issue is the huge banking cartel. Banks have ganged up to deny many Kenyans loans, then blame the rate cap.
They want to be allowed to operate under the previous environment to continue making crazy profits.
This is nothing but blackmail.

By the way many countries have interest rate caps, even South Africa.
Click to expand...
Now I can clearly see you have no idea of how banks work or what rate caps can or cannot do. When You say that rate caps have no implications are you assuming that Dr. Njoroge-CBK,Dr. Ndii, IMF et al are useless economists? So they should follow a layman like you?
When you say we have a huge banking cartel, who do you think they are exploiting? because its definately NOT the private borrowers, because even with rate caps private sector borrowing went even further down. You want to know who the banking cartel are exploting? Look at their loan books..Gok! And Gok=Taxpayers
 
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