KCB of Kenya Nine-Month Profit Growth Slows as Loan Income Falls

NAIROBI (Capital Markets in Africa) – KCB Group Ltd., Kenya’s biggest bank by assets, posted slower growth in profit in the first nine months of the year as income from loans dropped.

Profit grew to 15.1 billion shillings ($145.7 million) from a restated 14.4 billion shillings a year earlier, as earnings from loans decreased 1 percent to 35.7 billion shillings, the Nairobi-based bank said in an emailed statement. Non-interest income climbed by almost a fifth to 17.5 billion shillings, helping drive a 5 percent profit increase, compared with a 15 percent rise a year earlier.

KCB’s loan book expanded by 15 percent to 419.5 billion shillings and bad debts grew 17 percent to 30.9 billion shillings, the lender said. It decreased coverage for non-performing loans to 3.14 billion shillings from 3.4 billion shillings during the previous period.

Banks earnings in Kenya have fallen since the government imposed a cap on commercial lending rates in August 2016, crimping returns on loans. The limits have slowed private sector credit growth in East Africa’s largest economy to just 1.6 percent in August, compared with 5.4 percent a year earlier.

KCB shares climbed 0.6 percent to 41 shillings on Wednesday. They have gained 41 percent so far this year, outpacing a 21 percent increase in the Nairobi Securities Exchange All Share Index.