(NAIROBI, KENYA) – KCB Group has raised its interim dividend by 50 percent to KES 3 per share after reporting a 14.2 percent growth in net profit for the half year ended June.
The regional lender posted a net profit of KES 36 billion, up from KES 31.5 billion recorded in the same period last year. The profit figure is equal to $278 million or £219 million at current exchange rates.
Last year KCB paid an interim dividend of KES 2 per share. That payment was accompanied by an additional special payout of KES 2 per share from gains realised from the sale of National Bank of Kenya to Nigeria’s Access Bank.
KCB management said it will comply with its dividend policy of distributing between 35 percent and 50 percent of the bank’s annual profit. This will apply even without one off gains such as the NBK sale.
“We did about 32 percent payout last year, but that included a special dividend of the distribution of KES 3 from the sale of NBK. Now we are saying we want to get to a minimum 35 percent in 2026 out of pure profits from underlying business, not one offs,” said KCB Group CEO Paul Russo.
The group had been retaining the bulk of its earnings in the last four years as it funded regional expansion. Its Kenyan unit, which is the group’s main contributor, recorded mixed performance.
The Kenyan operations outpaced the profitability of its regional subsidiaries in the half year to June 2026. The unit posted a 16 percent growth in net profit to KES 26.5 billion, up from KES 22.8 billion in the period under review. That is equal to $205 million or £161 million.
Its subsidiaries, which include Rwanda, the Democratic Republic of Congo, Uganda, Tanzania, Burundi and South Sudan, saw their contribution to the group’s net profit grow by 10.3 percent to KES 9.52 billion. That is equal to $74 million or £58 million.
The group’s profit growth was driven by a cheaper cost of funds and lower loan loss provisions following improved quality of its loan book.
Non performing loans reduced by KES 17.3 billion in the 12 months to June to close at KES 203.8 billion. That is equal to $1.58 billion or £1.24 billion. The bad loans stood at 15.1 percent of the total loan book, down from 18.7 percent.
This is the lowest non performing loan ratio posted by the lender in more than four years. KCB attributes this to court decisions in its favour after some defaulters sued it for pursuing loans extended to them.
The group grew its deposit base by 15.1 percent to KES 1.71 trillion. That is equal to $13.2 billion or £10.4 billion. However, interest paid out to savers declined by 4.6 percent as the price of deposits fell across the region.
Its loan book expanded 13.2 percent to KES 1.24 trillion. That is equal to $9.6 billion or £7.6 billion. This led to a 4.2 percent expansion in interest income.
“There was a five percent decline in interest expense on customer deposits driven by strategic re-pricing of high cost deposits and further supported by a reduction in the cost of funds from 3.9 percent in June 2025 to 3.4 percent this year,” said Mr Russo.
KCB Investment Bank recorded 226.6 percent growth in profit before tax to KES 503.2 million. That is equal to $3.9 million or £3.1 million. The growth was driven by increased advisory mandates and capital markets transactions.
The investment bank’s second half results are expected to be boosted by its role in the government sale of its KES 204.3 billion stake in Safaricom. That stake is equal to $1.58 billion or £1.24 billion.
KCB Corporate Trustee Services posted a 79.8 percent increase in profit before tax to KES 142.5 million. That is equal to $1.1 million or £870,000. The performance was supported by growth in trustee and fiduciary services.
KCB Bancassurance Intermediary delivered KES 335.4 million in profit before tax. That is equal to $2.6 million or £2 million. The figure represented a 47 percent drop compared to the previous year.
Management attributed the drop in bancassurance business to changes in insurance policy regulations in Kenya. The changes required a shift in how commissions are paid.