According to a statement released on Wednesday, Kenya’s KCB Group (KCB.NR), a top-two commercial bank, has reported that its profit before tax for the first nine months of this year has decreased by 6%, coming in at 40.6 billion shillings ($266.51 million).
KCB, which also has operations in Uganda, Tanzania, Burundi, Rwanda, South Sudan, and the Democratic Republic of the Congo, stated that a challenging economic climate in the country’s primary market was the cause of the decline.
“We have had a rather difficult nine months due to a tough operating environment that has negatively affected our customers,” Paul Russo, the CEO of KCB, said in a statement. “We have had a rather difficult nine months due to a difficult operating environment that has negatively affected our customers.”
The pressure being put on the market in Kenya was, however, countered by the robust expansion occurring in a number of the regional markets. According to KCB, regional subsidiaries contributed 27.9% to group earnings. This figure represents an increase from 16.4% the previous year.
The impact of a sharp devaluation of the Kenyan shilling on client loans denominated in dollars led to the group’s provisions for bad debts more than doubling, reaching 15.85 billion Kenyan shillings. This was mainly because the loans were denominated in dollars.
On the other hand, the percentage of loans that were considered non-performing went down throughout the time, according to the bank, which attributed the fall to improvements in its Kenyan operations and subsidiaries, such as Tanzania.
During the time in question, KCB saw a significant increase in its income from transactions and net interest income.