KCB Group, East Africa's largest commercial bank by assets, has reported a 20.8 per cent rise in half-year profit before tax to Sh49.3 billion, driven by strong income growth and disciplined cost management.
Profit after tax climbed 14 per cent to Sh36.9 billion for the six months to June 2026, with earnings per share rising to an annualized Sh22.45 per share, up from Sh19.65 per share a year earlier.
Total operating income rose 9.5 per cent to Sh108.1 billion, driven by non-interest income as the bank diversified beyond traditional lending.
Non-interest income, which includes fees and commissions, trade finance, foreign exchange trading income and other charges, grew 15.4 per cent to Sh34.1 billion, while net interest income grew 7 per cent to Sh74 billion.
The lender cut loan loss provisions by 13.6 per cent to Sh10.8 billion, as asset quality improved during the period. Gross non-performing loans declined by Sh17.3 billion to Sh203.8 billion, lowering the Non Performing Loans(NPL) ratio to 15.1 per cent from 18.7 per cent a year earlier.
KCB Group attributed the improvement to stronger recoveries, rehabilitation of distressed facilities and tighter credit-risk management, a notable turnaround in asset quality for the lender, which in recent times, has faced investor concerns over bad loans.
KCB Group’s balance sheet expanded sharply during the period, with total assets rising 16.8 per cent to Sh2.3 trillion. Customer deposits grew 15.1 per cent to Sh1.7 trillion, providing room for the group to increase gross lending by 14.2 per cent to Sh1.3 trillion.
Regional subsidiaries contributed 27.7 per cent of group’s pre-tax profit and 31.1 per cent of total balance sheet assets.
Among non-banking subsidiaries, KCB Investment Bank's pre-tax profit rose 226.6 per cent to Sh503.2 million on higher advisory mandates and capital markets transactions. KCB Corporate Trustee Services profit before tax increased by 79.8 per cent to Sh142.5 million while KCB Bancassurance Intermediary Limited reported pre-tax profit of Sh335.4 million.
The board declared an interim dividend of Sh3.00 per share, up 50 per cent from Sh2.00 per share a year earlier, for a total distribution of Sh9.64 billion.
The interim dividend will be paid on 10th November 2026 to shareholders on the register at the close of business on 2 September 2026.
KCB Group Chief Executive, Paul Russo, said the results reflected the resilience of the group’s diversified business model and regional footprint despite a difficult operating environment.
"Our strong half-year performance reflects the resilience of KCB Group's diversified business model, the strength of our regional footprint, and the confidence our customers continue to place in us,” he said.
“Despite a tough operating environment, we remain committed to supporting businesses and households, accelerating digital transformation and creating long-term sustainable value for our shareholders and the communities which we serve," he added.
Update on Pesapal Limited minority stake acquisition and Ethiopia expansion
KCB Group CEO, Paul Russo, told investors that approval from Tanzania’s competition authority is still pending before the lender can complete its acquisition of a minority stake in Pesapal Limited.
KCB Group is still evaluating an entry into Ethiopia, with CEO Paul Russo ruling out a greenfield investment and saying the lender is pursuing an acquisition. Russo told investors that KCB has sufficient capital to fund an Ethiopian expansion without affecting its dividend policy.
