KCB Group #ticker:KCB doubled its net profit for the first six months to June to Sh15.3 billion as its subsidiary National Bank of Kenya #ticker:NBK returned to profitability.
The bank's earnings came on the back of reduced provisioning for bad debts from Sh11 billion set aside last year to Sh6.5 billion in June 2021, allowing the lender to plough back the profits.
KCB also made Sh47.1 billion through lending to the private sector and government, a 14 percent jump from Sh41.3 billion it made in a similar period last year.
Its investment in National Bank is also paying back as the subsidiary posted a Sh717.6 million in half-year net profit from a loss of Sh381.3 million in 2020.
“We saw a strong first half of the year for the business with improved economic activity. The resilient and diversified nature of our business has helped us navigate the unfolding impact of the Covid-19 pandemic,” said KCB Group chief executive Joshua Oigara at an investor briefing on Thursday.
A rebound in the economy has seen lenders report exceptional results as customers resume loan repayments and borrowing.
Last year, banks took a conservative approach on the back of the pandemic to set aside billions of money to cover for loan defaults, rising to 45.8 percent according to the Kenya Bankers Association.
KCB said a huge chunk of its Sh95.7 billion non-performing loan that grew from Sh83.9 billion in the same period last year occurred during the second half of 2020, highlighting the strain on customers and their business because of the healthcare crisis.
With reduced loan loss provisioning, the lenders are ploughing back the money to increase lending and boost their profits.
KCB Group's loan book grew to Sh606.9 billion in June this year, from Sh559.8 billion in the first half of last year. Customer deposits grew from Sh758.2 billion to Sh786 billion in a similar period.