The bank, which also operates in Rwanda, Burundi, Tanzania, Uganda and South Sudan, said its pretax profit fell to 25.7 billion shillings ($234.3 million) and its net profit to 19.6 billion shillings. Its full-year pretax profit rose 9% the previous year.
It said its non-performing loans in 2020 rose to 96.6 billion shillings from 63.4 billion shillings a year earlier, while the ratio of non-performing loans to gross loans rose to 14.7% from 10.9%.
"The operating environment caused a significant increase in credit risks which pushed up the group's cost of risk, leading to an increase in loan provisions to 27.1 billion shillings," it said in a statement.
In 2019, provisions for loan losses stood at 8.9 billion shillings. It said it expects its NPL ratio to fall to 12.5% this year.
Central banks in Kenya and other countries where KCB Group operates allowed lenders to provide relief to customers, such as loan restructuring and payment rescheduling, from mid-March 2020 after the first COVID-19 cases were reported in the region.
The bank said its net interest income rose to 67.9 billion shillings from 56.1 billion shillings the previous year. Net loans and advances jumped 11% to 535.4 billion shillings, and the bank expects 10% growth this year.
"Signs of recovery were evident at the tail end of the year with increased business activity, and we believe this momentum will carry into 2021," Chief Executive Joshua Oigara said in the statement.
($1 = 109.7000 Kenyan shillings)
(Reporting by George Obulutsa; Editing by Jan Harvey)
By George Obulutsa
