KCB investors set for bumper Sh9.6b dividend as profit surges

KCB Group shareholders are set to reap a Sh9.6 billion windfall after Kenya’s largest bank by assets reported a 64.9 per cent surge in net profit in 2024.

This was fueled by robust growth across its diversified business segments.

The bank’s profit after tax climbed to Sh61.8 billion, a significant leap from Sh37.5 billion in 2023, the lender announced in a statement on Wednesday. 

The bank’s board proposed a final dividend of Sh1.5 per share, bringing the total dividend for the year to Sh3.0 per share, rewarding investors with a substantial payout amidst a challenging economic climate.

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The National Treasury is among the major beneficiaries and is poised to receive Sh1.89 billion due to its 19.76 per cent stake.

The state-owned National Social Security Fund (NSSF) will also enjoy a significant return, receiving Sh960 million.

Local individual investors are set to earn Sh2.49 billion from their 25.86 per cent stake, while foreign investors will pocket Sh1 billion in dividends. 

“The strong performance illustrates our resolve over the past 3 years to build an organisation for the future that is anchored on delivering value for our customers, shareholders and all stakeholders,” said KCB Group chief executive Paul Russo. 

Mr Russo attributed the improved performance to the success of KCB’s diversification strategy, with subsidiaries, excluding KCB Bank Kenya, contributing over a third of total assets and profit after tax.

Total income surged 24.0 per cent to Sh204.9 billion, driven by a 28 per cent increase in net interest income and robust non-funded income from fees, commissions, trade finance, and foreign exchange trading. 

Operating costs increased 11.8 per cent to Sh92.9 billion, reflecting investments in technology and inflationary pressures.

Provisions for expected credit losses fell 11.0 per cent, indicating improved asset quality, although the non-performing loan (NPL) ratio remained elevated at 19.2 per cent due to broader economic headwinds. 

Customer deposits reached Sh1.4 trillion, while customer loans and advances stood at Sh990.4 billion.

“We are optimistic that there will be a pickup in economic activity this year across markets,” said KCB Group Chairman Joseph Kinyua, emphasising the bank’s commitment to sustainability and Environmental, Social, and Governance (ESG) priorities. 

KCB’s planned sale of National Bank of Kenya to Nigeria’s Access Bank, subject to regulatory approvals, is expected to streamline operations, the lender said. 

KCB’s dividend boom follows Stanbic Holdings’ recent announcement of a record Sh8.19 billion dividend payout, reflecting a broader trend of strong earnings and shareholder returns among major lenders.

Stanbic’s total payout of Sh20.74 per share, a more than 30 per cent increase from the previous year, highlights the sector’s resilience. 

The higher dividend payouts by KCB and Stanbic signal increased optimism about the economy’s future, despite persistent challenges.

Analysts anticipate this trend to continue as other tier-one lenders release their financial results, offering a welcome boost to income-hungry shareholders amidst ongoing economic uncertainty.