KCB Surpasses Equity Bank with Sh44.5B Profit

KCB posts Sh44.5B profit in 9 months, outpacing Equity Bank. Stock surges 78.8% YTD despite rising non-performing loans.

KCB Surpasses Equity with Sh44.5 Billion Profit in Nine Months

KCB Group Plc has reclaimed its title as Kenya’s top bank, reporting a net profit of Sh44.5 billion for the nine months ending September 2024 — a 49% increase compared to the same period last year.

This performance places it ahead of arch-rival Equity Bank, which posted Sh37.5 billion in profit over the same window.

Strong Core Business Drives Growth

The profit growth was supported by strong returns from both interest and non-interest income, highlighting KCB’s robust and diversified revenue model. The group has continued to expand across retail, SME, and corporate banking segments in Kenya and the region.

“The journey has not been without its hurdles, but our ability to walk alongside our customers has driven our success,” said KCB CEO Paul Russo.

Non-Performing Loans Remain a Concern

Still, the lender’s non-performing loan (NPL) ratio rose to 18.5%, up from 16.5% in 2023. The increase underscores persistent credit risk, particularly in industries hit hard by post-COVID recovery challenges and elevated interest rates.

Lawrence Kimathi, the Group Chief Financial Officer, called the NPL issue a “pain point” and said the bank is focused on loan restructuring and aggressive recovery strategies.

Stock Soars on Strong Investor Confidence

KCB’s financial resilience has won investor confidence. Its stock price has soared 78.8% year-to-date, making it the best-performing bank stock on the Nairobi Securities Exchange (NSE).

This impressive run reflects market optimism over the bank’s earnings and regional expansion strategy.

KCB to Sell NBK to Nigeria’s Access Bank

In a bid to streamline its operations, KCB plans to divest from its struggling subsidiary, the National Bank of Kenya (NBK). In early 2024, KCB struck a deal to sell NBK to Access Bank of Nigeria.

• Nigerian regulatory authorities have already given the green light.
• The deal is currently under review by the Central Bank of Kenya (CBK).

KCB says the move will help cut losses and allow it to concentrate on more profitable business lines.

Key Q3 2024 Financial Highlights

Looking Ahead: Strong Finish Expected

With macroeconomic conditions improving in East Africa and its internal operations being streamlined, KCB is poised to finish 2024 on a high.

“We’re seeing positive economic tailwinds, and we plan to close the year on a strong note,” CEO Paul Russo said.