By JAMES ANYANZWA

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KCB Group Plc posted a 54 percent growth in net profit for the three months to March 31, largely supported by growth in interest and non-interest income and a reduction in loan loss provisions.

The regional lender returned a profit after tax of Ksh9.78 billion ($84.31 million) compared with Ksh6.37 billion ($54.91 million) in the same period last year.

“We are optimistic of improved business growth in the remaining part of the year as economic fundamentals improve in the East African economy despite global threats and other local developments including the upcoming general election in Kenya,” Group Chairman Andrew Kairu said.

“Our priority is to harness economic drivers to accelerate the pace of recovery and growth,” added Mr Kairu

The Group’s unaudited financial statements show a 26 percent surge in total revenues to Ksh29.03 billion ($250.25 million) from Ksh23.04 billion ($198.62 million) with total costs going up by 16.8 percent to Ksh12.9 billion ($111.2 million) from Ksh11.1 billion ($95.68 million) in the same period last year.

Net interest income earned on loans and government securities grew by 18 percent to Ksh19.7 billion ($169.82 million) while non-funded income or non-interest income grew by 47.2 percent to Ksh9.3 billion ($80.17 million).

The Group’s investments in government securities grew by 32.6 percent to Ksh281.8 billion ($2.42 billion) from Ksh212.5 billion ($1.83 billion)

Loan loss provisions decreased by 27.5 percent to Ksh2.07 billion ($17.84 million) from Ksh2.86 billion ($24.65 million) even as the non-performing loan book continued to come under pressure due to slow recovery in the construction, hospitality and part of the manufacturing sectors. Customer deposits increased by 12.9 percent to Ksh845.8 billion ($7.29 billion), while loan book increased by 18 percent to Ksh704.4 billion ($6.07 billion). The Group’s balance sheet expanded by 19.3 percent to Ksh1.2 trillion ($10.34 billion), following the acquisition and consolidation of Banque Populaire du Rwanda.

Last year, KCB acquired 62.06 percent stake in BPR from the British financial services conglomerate Atlas Mara Ltd (ATMA) and later increased the stake to 76.67 percent by acquiring additional 14.61 percent of the shares from the minority shareholders.

The transaction increased KCB’s assets by 15.4 percent to Ksh1.13 trillion ($9.74 billion). KCB has operations in Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan and a representative office in Ethiopia It is also keen on entering the Democratic Republic of Congo as part of its pan-African expansion bid.

Last year, regional subsidiaries contributions to the Group’s profit increased to 13.7 percent from 13.6 percent in 2020.