KCB Group on Wednesday announced that its net profit for the first quarter of 2023 dropped to Sh9.8 billion from Sh9.9 billion posted during a similar period last year.

The bank has blamed this on a significant increase in provisions for bad debt with loan-loss increasing to Sh4.12 billion from Sh2.08 billion recorded in the first three months of 2022.

However, the total assets for KCB, with a presence in Uganda, Tanzania, DRC, Rwanda, Burundi and South Sudan, rose to Sh1.63 trillion from 1.2 trillion in Quarter 1 of 2022.

Its revenues also rose to Sh36.9 billion on the back of non-funded income from customer transactions across the Group and consolidation of its Trust Merchant Bank (TMB) in DRC.

The Group’s other businesses, except KCB Bank Kenya, contributed a profit rise of 35 per cent from 17.2 per cent as contribution to total assets grew to close Q1 at 38.2 per cent.

“The first quarter performance highlights the resilience of the business across the corporate and retail franchises. The regional businesses performed well, giving credence to the regional expansion strategy,” said KCB Group CEO Paul Russo.

Key performance Highlights of Q1 2023:

• NFI grew by 59.2 per cent to Sh14.8 billion from service fee income stream.

• TMB contributed Sh1.9 billion in pre-tax profit in Q1 and 14 per cent to Group total assets.

• Costs grew by 46.1 per cent from TMB consolidation and expenditure to support extra revenues generated.

• Provisions rose by 99 per cent due to higher credit risk and forex devaluation impact in Kenya.

• NPL ratio stood at 17.5 per cent due to downgrades from KCB Kenya business.

• Total assets increased 40 per cent to Sh1.63 trillion.

• Customer loans went up by 32 per cent to Sh928.8 billion and customer deposits rose by 41.5 per cent to Sh1.20 trillion, mainly from TMB in DRC.

• Shareholder funds grew by 17 per cent to Sh214.8 billion.

“While the Group’s growth in the past has been majorly driven by Kenya, its future hinges on becoming a significant regional player. We therefore continued to bolster our capacity to match the meaningful role that we seek to play and become an undisputed leader in the region,” said KCB Group Chairman Andrew Kairu.