Kenyan banks post record profits amid 2024 economic challenges
The success of these financial institutions was largely driven by their ability to manage operations efficiently, with KCB Group leading the pack.
Kenya’s listed banks have achieved a landmark net profit of Sh240.1 billion for the year ending December 2024, a record-high despite a challenging economic environment.
This outstanding performance comes as commercial banks saw a decline in lending, largely attributed to high interest rates that discouraged borrowing.
In addition, the Central Bank of Kenya’s (CBK) reduction of the base lending rate from 13% to 10.75% last year was expected to ease the burden on customers but did not translate into an immediate boost in borrowing.
The success of these financial institutions was largely driven by their ability to manage operations efficiently, with KCB Group leading the pack.
The bank reported a significant 64.9% increase in net profit, reaching Sh61.8 billion.
KCB Group Chairman Joseph Kinyua expressed optimism about the year ahead, noting that economic recovery, particularly in key service sectors and agriculture, will likely drive growth.
"We are excited about the strong profits witnessed across all entities. We are optimistic that there will be a pickup in economic activity this year across markets, supported by resilience of key service sectors and agriculture, expected recovery in growth of credit to the private sector, and improved exports," Kinyua stated.
Equity Group posted a solid Sh48.8 billion profit, also seeing an increase in dividend payouts, with a Sh16 billion dividend distribution.
Co-operative Bank of Kenya and NCBA Group saw profit rises of 9.8% and 1.9%, respectively, with both banks proposing attractive dividends to their shareholders.
The NCBA Group’s Sh5.50 per share dividend comes after a steady track record of increasing payouts over four consecutive years.
Among the notable beneficiaries of the NCBA’s cash distribution are billionaire families, including the Kenyattas and Ndegwas, who hold significant stakes in the bank.
"The board has resolved to recommend to the Shareholders... the payment of a final dividend for the year of Sh3.25 per share, which, together with the interim dividend of Sh2.25 per share, brings the total dividend for the year 2024 to Sh5.50 per share," the financial statement revealed.
Other banks such as Absa Bank Kenya, Standard Chartered Bank Kenya, and I&M Group also reported impressive results, with Absa’s profits jumping by 27.5% to Sh20.87 billion.
Standard Chartered declared an eye-popping Sh45 per share dividend, following a 45% rise in profits, while I&M Group grew its net profit by 21.9%, leading to an increased dividend payout.