KCB : H1 2019 Unaudited Financial Statements

KCB GROUP PLC UN-AUDITED FINANCIAL STATEMENTS AND OTHER DISCLOSURES

FOR THE PERIOD ENDED 30 JUNE 2019

				BANK			COMPANY			GROUP
			30-Jun-18	31-Dec-18	31-Mar-19	30-Jun-19	30-Jun-18	31-Dec-18	31-Mar-19	30-Jun-19	30-Jun-18	31-Dec-18	31-Mar-19	30-Jun-19
I. STATEMENT OF FINANCIAL POSITION	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000
Un-audited	Audited	Un-audited	Un-audited	Un-audited	Audited	Un-audited	Un-audited	Un-audited	Audited	Un-audited	Un-audited
A. ASSETS
1.		Cash (both Local & Foreign)	6,152,503	8,147,290	6,218,297	5,876,137	-	-	-	-	8,844,806	11,062,802	10,662,173	10,388,163
2.		Balances due from Central Bank of Kenya	28,500,882	30,977,080	28,808,413	36,967,985	-	-	-	-	28,500,882	39,038,130	45,669,341	55,657,692
3.		Kenya Government and other securities held for dealing purposes	-	-	-	-	-	-	-	-	-	-	-	-
4.		Financial Assets at fair value through profit and loss	-	-	-	-	-	-	-	-	-	-	-	-
		Investment securities:
5.		a) Held at armotized cost: a. Kenya Government securities	25,087,739	27,347,610	40,679,833	54,945,590	-	-	-	-	25,177,938	30,515,506	43,411,594	56,554,157
		b. Other securities	46,533	-	-	-	-	-	-	-	5,452,142	6,658,706	6,130,196	7,114,504
6.		Fair value through OCI: a. Kenya Government securities	69,666,147	72,296,603	73,333,775	62,991,869	-	-	-	-	72,018,993	79,362,566	79,669,319	69,252,495
		b. Other securities	2,020,691	3,369,846	3,949,128	2,057,650	38,907	34,213	33,626	27,896	9,895,938	3,532,802	4,096,159	2,085,546
7.		Deposits and balances due from local banking institutions	15,885,023	7,985,156	6,078,270	2,662,400	884,216	898,979	893,966	901,605	15,885,023	7,985,156	6,078,270	2,662,400
8.		Deposits and balances due from banking institutions abroad	5,353,396	4,865,897	5,058,303	7,696,175	-	-	-	-	33,752,125	24,031,511	13,290,142	14,302,598
9.		Tax recoverable	-	-	-	23,081	61,611	68,639	68,639	68,638	150,945	-	-	130,388
10.		Loans and advances to customers (net)	386,578,198	417,230,271	424,828,537	435,726,167	-	-	-	-	421,508,507	455,880,284	464,262,958	478,730,510
11.		Balances due from group companies	4,135,132	3,720,491	3,251,795	4,049,464	252,250	6,485,053	6,390,520	5,187,202	-	-	-	-
12.		Investments in associates	-	-	-	-	125	125	125	125	-	-	-	-
13.		Investments in subsidiary companies	-	-	-	-	67,648,950	68,035,825	68,036,500	68,036,500	-	-	-	-
14.		Investments in joint ventures	-	-	-	-	-	-	-	-	-	-	-	-
15.		Investment properties	-	-	-	-	-	-	-	-	-	-	-	-
16.		Property and equipment	7,301,418	7,121,150	6,144,796	7,604,029	559,774	648,966	654,948	655,951	10,328,994	11,007,625	9,888,315	13,551,623
17.		Prepaid lease rentals	130,759	127,013	127,013	125,765	-	-	-	-	131,514	129,018	129,018	127,771
18.		Intangible assets	2,903,205	2,861,074	3,721,204	3,769,978	-	-	-	-	3,085,579	3,003,113	3,847,630	2,523,758
19.		Deferred tax asset	9,142,506	8,396,643	8,746,909	9,221,805	5,554	102,168	126,332	140,453	9,977,424	9,585,223	9,494,550	9,929,624
20.		Retirement benefit asset	1,018,000	658,000	658,000	658,000	-	-	-	-	1,018,000	658,000	658,000	658,000
21.		Other assets	18,788,721	26,618,752	22,941,808	18,682,327	994	-	7,224	8,188	21,952,826	31,862,149	28,375,763	22,850,037
22.		TOTAL ASSETS	582,710,853	621,722,876	634,546,081	653,058,422	69,452,381	76,273,968	76,211,880	75,026,558	667,681,636	714,312,591	725,663,428	746,519,266
B. LIABILITIES
22. Balances due to Central Bank of Kenya	-	-	-	-	-	-	-	-	-	-	-	-
23. Customer deposits	470,284,229	475,395,672	491,016,763	502,762,380	-	-	-	-	524,938,523	537,459,617	552,204,662	563,236,258
24.		Deposits and balances due to local banking institutions	70,194	7,000,000	500,000	5,587,598	-	-	-	-	70,194	7,000,000	5,000,000	5,587,598
25.		Deposits and balances due to foreign banking institutions	209,267	4,216,955	404,185	3,133,868	-	-	-	-	8,499,695	13,104,797	9,016,377	13,251,212
26.		Other money market deposits	-	-	-	-	-	-	-	-	-	-	-	-
27.		Borrowed funds	17,102,046	18,933,205	18,734,182	19,037,455	-	-	-	-	20,698,615	22,447,432	21,465,662	22,418,516
28.		Balances due to group companies	-	-	-	-	990,305	112,055	111,102	109,474	-	-	-	-
29.		Tax payable	2,568,559	55,349	2,955,282	-	-	-	-	-	2,593,263	308,534	2,723,231	1,654
30.		Dividends payable	-	-	-	6,387,716	-	-	-	6,321,696	-	-	-	6,321,696
31.		Deferred tax liability	-	-	-	-	-	-	-	-	42,640	-	-	-
32.		Retirement benefit liability	-	-	-	-	-	-	-	-	-	-	-	-
33.		Other liabilities	9,287,635	18,332,749	18,333,117	15,480,000	15,499	55,013	70,757	79,776	11,854,815	20,331,073	20,290,172	18,178,520
34. TOTAL LIABILITIES	499,521,930	523,933,930	531,943,530	552,389,017	1,005,804	167,068	181,859	6,510,946	568,697,745	600,651,453	606,200,104	628,995,454
C. SHAREHOLDERS' FUNDS
35.		Paid up/Assigned capital	53,986,100	53,986,100	53,986,100	53,986,100	3,066,056	3,066,057	3,066,057	3,066,057	3,066,057	3,066,057	3,066,057	3,066,057
36.		Share premium/(discount)	-	-	-	-	21,646,777	21,646,777	21,646,777	21,646,777	21,646,777	21,646,777	21,646,777	21,646,777
37. Revaluation reserves	170,310	2,100,551	2,260,607	1,186,440	(37,836)	(42,530)	(43,117)	(48,847)	124	1,851,626	2,146,879	1,142,982
38. Retained earnings/Accumulated losses	25,582,156	33,927,032	38,580,581	42,213,599	40,705,523	43,771,453	43,695,161	40,785,568	69,905,510	85,182,131	90,955,873	94,839,017
39. Statutory loan loss reserve	-	-	-	-	-	-	-	-	915,066	1,222,095	1,222,095	1,222,095
40. Other Reserves/Re-measurement of defined benefit asset/liability	384,300	44,100	44,100	44,100	-	-	-	-	384,300	(6,972,691)	(7,239,500)	(7,459,173)
41. Proposed dividends	3,066,057	7,731,163	7,731,163	3,239,166	3,066,057	7,665,143	7,665,143	3,066,057	3,066,057	7,665,143	7,665,143	3,066,057
42. Capital grants	-	-	-	-	-	-	-	-	-	-	-	-
43. TOTAL SHAREHOLDERS' FUNDS	83,188,923	97,788,946	102,602,551	100,669,405	68,446,577	76,106,900	76,030,021	68,515,612	98,983,891	113,661,138	119,463,324	117,523,812
44. Minority Interest	-	-	-	-	-	-	-	-	-	-	-	-
45. TOTAL LIABILITIES AND SHAREHOLDERS' FUNDS	582,710,853	621,722,876	634,546,081	653,058,422	69,452,381	76,273,968	76,211,880	75,026,558	667,681,636	714,312,591	725,663,428	746,519,266
II. STATEMENT OF COMPREHENSIVE INCOME
1. INTEREST INCOME
		1.1. Loans and advances	23,257,599	47,786,148	12,101,356	24,084,553	302,821	294,800	-	-	25,645,200	52,711,906	13,387,549	26,792,447
		1.2. Government securities	5,421,983	11,053,590	2,762,217	5,662,047	-	-	-	-	6,333,016	12,983,467	3,230,329	6,555,058
		1.3. Deposits and placements with banking institutions	179,951	470,035	129,078	193,887	9,811	22,281	-	-	241,402	585,325	159,386	255,278
		1.4. Other Interest Income	-	-	-	-	-	-	-	-	-	-	-	-
		1.5. Total interest income	28,859,533	59,309,773	14,992,651	29,940,487	312,632	317,081	-	-	32,219,618	66,280,698	16,777,264	33,602,783
2. INTEREST EXPENSE
	2.1. Customer deposits	6,444,802	13,772,004	3,069,113	6,213,287	-	-	-	-	7,316,332	15,464,365	3,575,443	7,240,246
		2.2. Deposits and placement from banking institutions	490,023	1,236,287	361,338	708,047	283,059	271,954	-	-	757,822	1,985,797	493,900	960,968
		2.3. Other interest expenses	-	-	-	-	-	-	-	-	-	-	-	-
		2.4. Total interest expenses	6,934,825	15,008,291	3,430,451	6,921,334	283,059	271,954	-	-	8,074,154	17,450,162	4,069,343	8,201,214
3.		NET INTEREST INCOME/(LOSS)	21,924,708	44,301,482	11,562,200	23,019,153	29,573	45,127	-	-	24,145,464	48,830,536	12,707,921	25,401,569
4.		OTHER OPERATING INCOME
		4.1. Fees and commissions on loans and advances	1,461,450	5,718,319	1,668,091	3,625,208	-	-	-	-	3,078,034	7,441,206	2,156,531	4,661,799
		4.2. Other fees and commissions	3,947,225	6,170,865	1,782,440	4,139,561	-	-	-	-	3,697,558	6,797,540	1,885,926	4,240,259
		4.3. Foreign exchange trading income	1,295,640	2,744,601	639,912	1,321,545	(18,176)	(14,016)	(5,013)	2,626	2,823,695	4,374,312	976,835	2,060,269
		4.4. Dividend Income	53	365	-	-	9,004,528	16,863,871	-	3,239,166	53	365	-	-
		4.5. Other income	1,705,794	3,934,627	916,797	1,900,556	62,272	105,824	24,883	77,680	1,880,430	4,360,140	1,030,682	2,209,837
		4.6. Total other operating income	8,410,162	18,568,777	5,007,240	10,986,870	9,048,624	16,955,679	19,870	3,319,472	11,479,770	22,973,563	6,049,974	13,172,164
5.		TOTAL OPERATING INCOME	30,334,870	62,870,259	16,569,440	34,006,023	9,078,197	17,000,806	19,870	3,319,472	35,625,234	71,804,099	18,757,895	38,573,733
6.		OTHER OPERATING EXPENSES
		6.1. Loan loss provision	739,650	3,136,286	988,314	2,698,420	-	-	-	-	827,684	2,944,367	1,163,108	3,031,105
		6.2. Staff costs	7,392,869	14,351,844	3,909,701	7,707,484	25,498	91,398	12,584	23,826	8,599,757	17,007,482	4,632,581	8,995,945
		6.3. Directors' emoluments	9,106	307,968	5,277	15,696	15,428	26,982	10,373	27,924	94,055	339,076	44,523	102,414
		6.4. Rental charges	368,177	762,574	191,387	69,036	-	-	-	-	668,798	1,262,514	311,496	184,713
		6.5. Depreciation charge on property and equipment	751,053	1,506,047	364,253	952,001	1,430	3,557	1,874	3,838	915,705	1,866,468	452,818	1,216,887
		6.6. Amortisation charges	544,612	1,212,187	285,470	629,034	-	-	-	-	590,075	1,279,757	300,648	666,209
		6.7. Other operating expenses	4,695,699	10,208,414	2,661,750	5,131,180	92,728	372,838	95,496	155,936	6,833,934	13,245,599	3,356,456	6,443,384
		6.8. Total other operating expenses	14,501,166	31,485,320	8,406,152	17,202,851	135,084	494,775	120,327	211,524	18,530,008	37,945,263	10,261,630	20,640,657
7. Profit/(loss) before tax and exceptional items	15,833,704	31,384,939	8,163,288	16,803,172	8,943,113	16,506,031	(100,457)	3,107,948	17,095,226	33,858,836	8,496,265	17,933,076
8. Exceptional items	-	-	-	-	-	-	-	-	-	-	-	-
9. Profit/(loss) after exceptional items	15,833,704	31,384,939	8,163,288	16,803,172	8,943,113	16,506,031	(100,457)	3,107,948	17,095,226	33,858,836	8,496,265	17,933,076
10. Current tax	(5,241,947)	(10,595,034)	(2,899,934)	(5,687,496)	(7,389)	(361)	-	-	(5,528,864)	(11,275,951)	(3,096,954)	(5,952,003)
11. Deferred tax	542,802	1,620,802	350,266	700,632	7,305	103,919	24,165	38,285	544,998	1,412,085	374,431	741,870
12. Profit/(loss) after tax and exceptional items	11,134,559	22,410,707	5,613,620	11,816,308	8,943,029	16,609,589	(76,292)	3,146,233	12,111,360	23,994,970	5,773,742	12,722,943
13. Minority Interest	-	-	-	-	-	-	-	-	-	-	-	-
14. Profit/(loss) after tax and exceptional items and Minority Interest	11,134,559	22,410,707	5,613,620	11,816,308	8,943,029	16,609,589	(76,292)	3,146,233	12,111,360	23,994,970	5,773,742	12,722,943

www.kcbgroup.com

KCB GROUP PLC UN-AUDITED FINANCIAL STATEMENTS AND OTHER DISCLOSURES

FOR THE PERIOD ENDED 30 JUNE 2019

				BANK			COMPANY			GROUP
		30-Jun-18	31-Dec-18	31-Mar-19	30-Jun-19	30-Jun-18	31-Dec-18	31-Mar-19	30-Jun-19	30-Jun-18	31-Dec-18	31-Mar-19	30-Jun-19
		KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000	KShs 000
		Un-audited	Audited	Un-audited	Un-audited	Un-audited	Audited	Un-audited	Un-audited	Un-audited	Audited	Un-audited	Un-audited
15. Other Comprehensive income:
	15.1. Gains/(Losses) from translating the financial statements of foreign operations	-		-	-	-	-	-	-	-	289,296	(918,220)	(381,155)	(362,138)
	15.2. Fair value changes in available-for-sale financial assets	274,893		3,032,380	228,651	(1,305,873)	(20,156)	(26,861)	(839)	(9,024)	124	2,366,710	421,790	(1,012,348)
	15.3. Re-measurement of defined benefit pension fund	-		(486,000)	-	-	-	-	-	-	-	(486,000)	-	-
	15.4. Share of other comprehensive income of associates	-		-	-	-	-	-	-	-	-	-	-	-
	15.5. Income tax relating to components of other comprehensive income	(82,468)		(763,914)	(68,595)	391,762	(6,047)	8,059	252	2,707	(37)	(564,213)	(12,190)	303,704
16. Other comprehensive income for the year net of tax	192,425		1,782,466	160,056	(914,111)	(26,202)	(18,802)	(587)	(6,317)	289,383	398,277	28,445	(1,070,782)
										3,139,916
17. Total comprehensive income for the year	11,326,984		24,193,173	5,773,676	10,902,197	8,916,827	16,590,787	(76,879)	12,400,743	24,393,247	5,802,187	11,652,161
18. EARNINGS PER SHARE - DILUTED & BASIC KSHS	0.41		0.42	0.42	0.44	5.83	5.42	-	-	7.90	7.83	7.53	8.30
						0.06				1.00				1.00
19. DIVIDEND PER SHARE - DECLARED KSHS	0.06		0.20	-	1.00	3.50	-	1.00	3.50	-
III. OTHER DISCLOSURES
1.NON-PERFORMING LOANS AND ADVANCES
	a) Gross Non-performing loans and advances	35,055,794		30,011,847	35,929,025	35,865,746					37,627,677	32,691,822	38,823,607	39,110,920
	b) Less Interest in Suspense	4,298,095		3,791,303	4,256,303	4,204,282					4,539,723	4,119,045	4,639,189	4,533,209
	c) Total Non-Performing Loans and Advances (a-b)	30,757,699		26,220,544	31,672,722	31,661,464					33,087,955	28,572,777	34,184,418	34,577,711
	d) Less Loan Loss Provision	18,136,908		13,339,097	14,541,637	15,405,091					19,374,003	14,380,593	15,179,879	16,080,637
	e) Net Non-Performing Loans and Advances (c-d)	12,620,791		12,881,447	17,131,085	16,256,373					13,713,951	14,192,184	19,004,538	18,497,074
	f) Discounted Value of Securities	9,107,788		11,432,696	15,798,783	14,228,392					11,333,760	15,943,763	21,050,017	19,393,193
	g) Net NPLs Exposure (e-f)	3,513,003		1,448,751	1,332,302	2,027,981					2,380,191	(1,751,579)	(2,045,479)	(896,119)
2.INSIDER LOANS AND ADVANCES
	a) Directors, Shareholders and Associates	1,202,573		2,706,409	2,233,339	990,498					1,203,894	2,730,448	2,255,696	1,011,996
	b) Employees	11,177,880		11,394,584	11,644,458	12,068,096					12,193,876	12,453,075	12,810,656	13,260,357
	c) Total Insider Loans and Advances and other facilities	12,380,453		14,100,993	13,877,797	13,058,594					13,397,770	15,183,523	15,066,352	14,272,353
3.OFF-BALANCE SHEET ITEMS
	a) Letters of credit,guarantees, acceptances	69,867,244		71,147,007	69,580,493	71,301,258					78,728,777	76,632,216	76,163,376	77,029,779
	b) Forwards, swaps and options	6,908,092		17,745,126	17,500,426	21,557,908					8,379,263	20,440,843	17,927,725	22,147,642
	c) Other contingent liabilities	-		-	-	-					-	-	-	-
	d) Total Contingent Liabilities	76,775,336		88,892,133	87,080,919	92,859,166					87,108,040	97,073,059	94,091,101	99,177,421
4.CAPITAL STRENGTH
	a) Core capital	74,385,277		87,957,222	89,803,971	90,335,643					88,946,964 109,939,064 112,809,462 113,108,596
	b) Minimum Statutory Capital	1,000,000		1,000,000	1,000,000	1,000,000					6,494,591	6,520,129	6,472,614	6,557,053
	c) Excess (a-b)	73,385,277		86,957,222	88,803,971	89,335,643					82,452,373 103,418,935 106,336,848 106,551,543
	d) Supplementary Capital	7,567,500		7,638,750	7,560,000	7,680,000					8,482,566	8,860,845	8,782,095	8,902,095
	e) Total Capital (a+d)	81,952,777		95,595,972	97,363,971	98,015,643					97,429,530 118,799,910 121,591,557 122,010,691
	f) Total risk weighted assets	501,238,786		537,572,619	548,967,531	559,531,486					566,099,443	607,822,826	622,119,690	627,324,755
	g) Core Capital/Total deposits Liabilities	15.8%		18.5%	18.3%	17.9%					16.9%	20.5%	20.4%	20.1%
	h) Minimum statutory Ratio	8.0%		8.0%	8.0%	8.0%					8.0%	8.0%	8.0%	8.0%
	I) Excess (g-h)	7.8%		10.5%	10.3%	9.9%					8.9%	12.5%	12.4%	12.1%
	j) Core Capital/total risk weighted assets	14.8%		16.4%	16.4%	16.1%					15.7%	18.1%	18.1%	18.0%
	k) Minimum Statutory Ratio	10.5%		10.5%	10.5%	10.5%					10.5%	10.5%	10.5%	10.5%
	l) Excess (j-k)	4.3%	5.9%	5.9%	5.6%					5.2%	7.6%	7.6%	7.5%
	m) Total Capital/total risk weighted assets	16.4%		17.8%	17.7%	17.5%					17.2%	19.5%	19.5%	19.4%
	n) Minimum statutory Ratio	14.5%		14.5%	14.5%	14.5%					14.5%	14.5%	14.5%	14.5%
	o) Excess (m-n)	1.9%		3.3%	3.2%	3.0%					2.7%	5.0%	5.0%	4.9%
	p) Adjusted Core Capital/Total Deposit Liabilities*	16.9%		19.5%	19.2%	18.7%					17.9%	21.3%	21.3%	20.8%
	q) Adjusted Core Capital/Total Risk Weighted Assets*	15.8%		17.2%	17.2%	16.8%					16.6%	18.8%	18.9%	18.6%
	r) Adjusted Total Capital/Total Risk Weighted Assets*	17.3%		18.6%	18.6%	18.2%					18.1%	20.3%	20.3%	20.1%
5.LIQUIDITY
	a) Liquidity Ratio	31.8%		29.4%	32.3%	32.2%					35.3%	33.3%	35.6%	34.9%
	b) Minimum Statutory Ratio	20.0%		20.0%	20.0%	20.0%					20.0%	20.0%	20.0%	20.0%
	c) Excess (a-b)	11.8%		9.4%	12.3%	12.2%					15.3%	13.3%	15.6%	14.9%

Summary consolidated statement of cash flow

				Unaudited	Audited	Unaudited
				30 June 2018	31 Dec 2018	30 June 2019
				KShs M	KShs M	KShs M
	Cash flows generated from operating activities			18,641	11,731	(5,472)
	Cash flows used in investing activities			(3,755)	(6,930)	(1,212)
	Cash flows used in financing activities			(329)	(1,646)	(1,344)
	Net increase/ (decrease) in cash and cash equivalents			14,557	3,155	(8,082)
	Cash and cash equivalents as at 1 January			47,474	47,474	50,629
	Cash and cash equivalents at period end			62,031	50,629	42,601
	Summary consolidated statement of changes in equity
				Revenue
			Share	and other	Proposed
		Share Capital	premium	reserves	dividends	Total
		KShs M	KShs M	KShs M	KShs M	KShs M
	At 1 January 2019	3,066	21, 647	81,283	7,665	113,661
	Profit for the period	-	-	12, 723	-	12,723
	Other comprehensive income net of tax	-	-	(1, 195)	-	(1, 195
	Dividends proposed during the year	-	-	(3,066)	3,066-	-
	Dividends paid in the year				(7,665)	(7,665)
	At 30 June 2019	3,066	21,647	89,745	3,066	117,524

*The adjusted capital ratios include the expected credit loss Provisions added back to Capital in line with CBK guidance note Issued in April 2019 on implementation of IFRS 9

MESSAGE FROM THE DIRECTORS:

The Directors have approved an interim dividend of KShs. 1/= for every ordinary share of KShs. 1/= held. The dividend will be paid on or about Friday, 15 November, 2019 to shareholders on the register at the close of business on Thursday, 5 September, 2019.

These financial statements are extracts from the books of the institution. The complete set of quarterly financial statements, statutory and qualitative disclosures can be accessed on the institution's website www.kcbgroup.com

They may also be accessed at the institution's head office located at Kencom House, Moi Avenue.

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8:33 PM

Andrew Kairu - Group Chairman

Joshua Oigara - Group Chief Executive Officer & Managing Director

Regulated by Central Bank of Kenya

www.kcbgroup.com