KCB Group posted a 15.3% rise in first-quarter pretax profit, signaling resilience across East Africa’s banking sector even as lower interest rates compressed margins and geopolitical tensions weighed on regional economic activity.
The Nairobi-based lender reported pretax profit of KShs. 24.4 billion for the three months ended March, up from KShs. 21.2 billion a year earlier, supported by strong loan growth, rising customer deposits, and increased income from digital lending and foreign exchange transactions.
Total operating income rose 8.5% to KShs. 53.6 billion as expansion in interest-earning assets helped cushion the impact of declining net interest margins following a wave of monetary easing across regional markets.
The lender’s balance sheet expanded 10.8% to KShs. 2.3 trillion, fueled by a 16% increase in customer deposits to KShs. 1.7 trillion, underscoring continued confidence among retail and corporate clients despite a challenging macroeconomic backdrop. Gross loans climbed to KShs. 1.32 trillion from KShs. 1.21 trillion a year earlier.
Chief Executive Officer Paul Russo said the bank’s performance reflected disciplined execution and continued investment in digital channels aimed at supporting trade and economic transformation across the region.
“Despite the challenging operating environment, we delivered solid growth driven by disciplined execution, continued investment in digital innovation, and our unwavering commitment to providing financing which catalyzes economic transformation across the region,” Russo said.
KCB also pointed to mounting risks linked to the conflict in the Middle East, warning of potential spillover effects including weaker credit demand, higher credit risk, and softer remittance inflows into East Africa.
The bank’s asset quality improved during the quarter, with the non-performing loan ratio declining to 16.6% from 19.3% a year earlier after aggressive recovery efforts and loan book expansion reduced bad loans to KShs. 217.8 billion.
At the same time, KCB increased provisions for possible loan losses to KShs. 4.9 billion, maintaining a cautious stance amid lingering economic uncertainty.
Non-funded income rose 8.3% to KShs. 17 billion, driven by higher digital loan disbursements and foreign exchange trading activity. Operating costs increased 7.3% to KShs. 24.3 billion due to higher staffing expenses, technology investments, and regional expansion costs.
Subsidiaries continued to play a larger role in earnings diversification, contributing nearly 30% of group pretax profit. The lender said performance excluding the divested National Bank of Kenya showed pretax profit growth of 17%.
Return on equity stood at 21.5%, while earnings per share increased to KShs. 22.18 from KShs. 20.03 a year earlier. Total shareholder equity rose 18.5% to KShs. 352.2 billion.
Chairman Joseph Kinyua said the results demonstrated the effectiveness of the bank’s long-term regional strategy and positioned the lender to benefit from growing trade and financial inclusion across East Africa.
Beyond banking operations, KCB continued to deepen its sustainability and development financing agenda. During the quarter, the group secured approval for a $96.9 million Green Climate Fund-backed financing program to support green investments for small businesses and farmers in Kenya.
The lender also expanded partnerships in refugee financial inclusion, sustainable education financing, and digital payments, while maintaining its visibility through sponsorship of the 2026 WRC Safari Rally.
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