KCB Q1 net earnings hit Sh17.8b to join rivals in defying tough times

KCB Group chief executive Paul Russo. [File, Standard]

KCB Group, Kenya’s largest bank by asset size, posted a 10.73 per cent rise in first-quarter net profit to Sh17.8 billion.

The lender joins tier-one rivals in delivering robust earnings that have made the banking sector a rare bright spot in an otherwise battered economy.

KCB’s after-tax profit for the three months ended March 31, 2026, rose from Sh16 billion a year earlier, driven by growth in interest-earning assets, a drop in interest expense, and high non-funded income, KCB said in a statement on Wednesday.

KCB total operating income grew 8.5 per cent to Sh53.6 billion in the period from Sh49.4 billion a year earlier. The improved performance came despite sustained interest rate cuts across East Africa that compressed net interest margins, as well as the ripple effects of the Middle East conflict on regional economies, including softer credit demand and lower remittance receipts, the bank said. 

“Despite the challenging operating environment, we delivered solid growth driven by disciplined execution, continued investment in digital innovation, and our unwavering commitment to providing financing,” said KCB Group chief executive Paul Russo. KCB’s net interest income rose nine per cent to Sh36.6 billion, helped by an 11 per cent decline in interest expense to Sh14.6 billion.

Non-funded income—comprised of fees and commissions—grew eight per cent to Sh17 billion, supported by higher digital loan disbursements and foreign exchange income.

The bank’s balance sheet expanded 10.8 per cent to Sh2.3 trillion, driven by a 16 per cent jump in customer deposits to Sh1.7 trillion. Gross loans grew 9.1 per cent to Sh1.32 trillion.

On asset quality, the non-performing loan (NPL) ratio fell to 16.6 per cent from 19.3 per cent a year earlier, while the bank set aside Sh4.9 billion in provisions.

KCB joins tier-one rivals Equity Group and Co-operative Bank of Kenya in posting strong results. 

Equity Group, Kenya’s largest bank by customer base, on Tuesday reported a 23.8 per cent jump in first-quarter net profit to Sh18.3 billion, driven by a surge in both interest and non-funded income. 

Co-operative Bank of Kenya also posted  a record first-quarter net profit of Sh8.41 billion, a 21.3 per cent rise that marked its strongest-ever quarterly performance. 

“The performance of these three tier-one lenders underscores the resilience of Kenya’s banking sector,” said independent economist Ian Njoroge. KCB’s subsidiaries outside Kenya contributed 29.5 per cent of group pre-tax profit, while its non-banking units sustained their earnings.

Group Chairman Joseph Kinyua said in a statement the strong start to the year affirmed the effectiveness of the bank’s long-term strategy and the resilience of its regional businesses. During the quarter, KCB secured Sh12.5 billion in green financing from the Green Climate Fund to support MSMEs and farmers.