KCB Group became the second Kenyan banking group to cross KSh 100 Bn in half-year operating income, after Equity Group breached the mark in H1 2025, as its income rose 9.5% to a record KSh 108.09 Bn.
- •Profit before tax climbed 20.8% to KSh 49.32 Bn, helped by stronger funded and non-funded income, lower credit impairment and improved cost efficiency.
- •For the six months ended June 2026, consolidated profit after tax rose 14.0% to KSh 36.87 Bn from KSh 32.33 Bn, extending KCB’s earnings to the highest first-half level in its historical series. Profit attributable to shareholders increased 14.5% to KSh 36.07 Bn.
- •KCB expanded its balance sheet 16.8% to a record KSh 2.30 Tn, more than three times the KSh 746.52 Bn recorded in H1 2019.
The slower growth in net profit relative to pre-tax earnings reflected a 46% increase in the tax charge to KSh 12.46 Bn.
The board raised the interim dividend 50% to KSh 3.00 per share, translating to a KSh 9.64 Bn payout. Shareholders on the register at the close of business on September 2 will receive the dividend on November 10. Earnings per share increased 14% to KSh 22.45.
Lower Funding Costs, Higher Fees Lift Income
Net interest income increased 7.0% to KSh 74.00 Bn, despite total interest income growing by a slower 4.0% to KSh 104.47 Bn. Interest expenses declined 2.9% to KSh 30.46 Bn as KCB repriced high-cost deposits and its cost of funds eased to 3.4% from 3.9%.
Non-interest income grew faster, rising 15.4% to KSh 34.08 Bn and increasing its contribution to total income to 31.5% from 29.9%. Net fees and commissions rose 18%, with lending fees up 30% on higher loan volumes, while foreign-exchange income increased 22% to KSh 6.35 Bn on increased transaction volumes.
Operating costs excluding impairment increased 6% to KSh 47.99 Bn, reflecting technology investment and costs associated with business and branch expansion. With revenue growing faster than costs, the cost-to-income ratio improved to 44.4% from 46.0%.
Loan impairment charges fell 13.6% to KSh 10.77 Bn, while the cost of risk declined to 1.7% from 2.2%.
Lending Expands as Bad Loans Decline
The lender’s gross loans grew 14.2% to KSh 1.35 Tn, while net loans increased 13.3% to KSh 1.24 Tn. Customer deposits rose 15.1% to KSh 1.71 Tn, driven by new customers across the corporate and retail segments. Deposits accounted for 74% of Group funding.
The lending expansion coincided with a significant improvement in asset quality. Gross non-performing loans declined KSh 17.24 Bn to KSh 203.83 Bn from KSh 221.07 Bn, lowering the non-performing loan ratio to 15.1% from 18.7%.
KCB said recoveries, rehabilitation of distressed facilities, settlements, government engagements and strategic write-offs helped reduce the stock of bad loans by about KSh 30 Bn over the past 15 months. Manufacturing and trade remain the most strained sectors, while real estate and personal lending recorded significant improvement.
Regional operations remained an important earnings contributor. Businesses outside KCB Bank Kenya generated KSh 15.0 Bn in profit before tax, up 10%, supported by Tanzania, Uganda, South Sudan and non-banking businesses. KCB Investment Bank’s profit before tax surged 227% to KSh 503 Mn, while KCB Corporate Trustee Services grew 80% to KSh 142 Mn.
Mobile loan disbursements increased 25% to KSh 314 Bn, equivalent to about KSh 1.7 Bn a day, as the lender continued expanding digital credit and payment products across its regional markets.
KCB ended the half with a 21.1% return on equity. Management’s full-year targets include a 20%-22% return on equity, 14%-16% non-performing loan ratio and 42%-44% cost-to-income ratio. Net loan and deposit growth were already running above KCB’s full-year guidance at the end of June.
