About this report

The KCB Group Plc Integrated Report and Financial Statement 2020 is our statutory and regulatory reporting disclosure. It comprises information about activities, strategy, approach to operating responsibly, financial, and non- financial results for the period of January 1, 2020 to December 31, 2020. The aim is to comprehensively report to our existing and prospective investors in an integrated

way to reflect how the organisation operates.

Framework

The report has been prepared in compliance with global best practice and prudent accounting frameworks. It is aligned to the provisions of the Companies Act, 2015, Capital Markets Authority (CMA) guidelines, the Nairobi Securities Exchange (NSE) Listings Manual, and Central Bank of Kenya (CBK) Prudential Guidelines. This report is also in compliance with the International Integrated Reporting Council (IIRC) guidelines. The Group's Annual Financial Statements were prepared in accordance with the International Financial Reporting Standards (IFRS). The report is part of our commitment to be transparent and accountable to our stakeholders.

The Group constantly considers whether there are additional reporting frameworks or metrics we could use to enhance our disclosures.

Assurance

The Annual Financial Statements for the Group, KCB Bank Kenya, National Bank of Kenya, KCB Bank Tanzania and KCB Bank South Sudan were audited by PricewaterhouseCoopers. KCB Bank Burundi and KCB Bank Rwanda were audited by KPMG, while KCB Bank Uganda was audited by EY.

Contents

Overview

Overview ....................................................................................................................

4

Group Perfomance Highlights.....................................................................................

5

Digital Channel Performance......................................................................................

6

Our 2020 Milestones .................................................................................................

8

2020 - 2023 Strategy................................................................................................

10

Our Value Creation Process......................................................................................

12

Our Capitals.............................................................................................................

14

COVID-19 Related Initiatives ....................................................................................

18

Operating Environment.............................................................................................

20

Reinforcing Our Market Capabilities.........................................................................

27

Who Governs Us

Group Chairman's Statement....................................................................................

28

Taarifa ya Mwenyekiti...............................................................................................

30

Group Board of Directors..........................................................................................

32

Group CEO & MD's letter to Shareholders ................................................................

34

Barua ya Afisa Mkuu Mtendaji wa Kundi na Mkurugenzi Mkuu..................................

38

Executive Committee................................................................................................

42

Report from the Group CFO.......................................................................................

44

Value Added Statement............................................................................................

46

Five Year Review.......................................................................................................

47

A Review of Our Strategic Themes..............................................

48

Our Sustainability Agenda........................................................................................

56

KCB Foundation........................................................................................................

58

Corporate Governance Statement ..............................................

62

Shareholding............................................................................................................

83

Board of Directors' Profiles.......................................................................................

84

Financial Statements & Notes....................................................

88

To ensure that we report on issues that matter to our stakeholders please provide any feedback and questions to: investorrelations@kcbgroup.comor visit www.kcbgroup.com

KCB strongly recommends adherence to COVID-19 safety guidelines.

All laid out Government regulations and health precautions were adhered to during the making of this report.

Overview

KCB Group is East Africa's largest financial solutions provider with operations in Kenya, Tanzania, South Sudan, Uganda, Rwanda, Burundi and Ethiopia (representative office). The Group

was established in 1896 and is headquartered in Nairobi, Kenya.

For over a century, the Group has been a catalyst for development, enabling growth and economic progress, supporting regional trade, and connecting millions of people across the world to opportunities on the African continent and beyond, whilst making positive social impact in the communities.

KCB Group Plc is a registered non-operating holding company that oversees KCB Bank Kenya and all the regional subsidiaries. It also owns National Bank of Kenya (NBK)- acquired in 2019- KCB Insurance Agency, KCB Capital, KCB Foundation and other associate companies. At the time of publishing this report, the Group was in the process of acquiring additional banking businesses.

Today, the Group has the largest branch network in the region with 359 branches, 1,104 ATMs, 23,460 point of sale (PoS)/merchants and agents offering banking services on a 24/7 basis. This is complemented by mobile banking and internet banking

services with a 24-hour contact center for our 25.2 million customers. The Group also has a wide network of correspondent relationships of over 200 banks across the world, thereby assuring our customers of a seamless facilitation of their international trade requirements wherever they are.

KCB Group shares are quoted at the Nairobi Securities Exchange (NSE), Dar-es-Salaam Stock Exchange (DSE), Uganda Securities Exchange (USE), and Rwanda Stock Exchange (RSE).

Our focus remains on areas where we believe we can make a significant difference in fulfilling customers' ambitions and driving financial inclusion while supporting businesses to grow. We provide a broad range of financial products and services in retail banking, corporate banking, investment banking and insurance. The Bank also offers digital financial services and Shariah-compliant products.

KCB has over the years continually invested in deepening its sustainability agenda that is anchored on building a responsible business for the future with special focus on environmental, social, financial and economic pillars.

Our Regional Presence

KCB Bank Kenya

KCB Bank

KCB Bank

KCB Bank

KCB Bank

KCB Bank

Ethiopia

National Bank of Kenya

Tanzania

South Sudan

Uganda

Rwanda

Burundi

(Representative

KCB Insurance Agency

Office)

KCB Foundation

KCB Capital

359

25.2m

KShs.

Branches

142,424,283,000

1,104 ATMs |

Customers

23,460 Agents &

7,525 Staff

Total Equity

POS / Merchants

4

INTEGRATED REPORT & FINANCIAL STATEMENTS

OVERVIEW

Group Performance Highlights

FinancialNon-Financial

Profit Before Income Tax (KShs. Million)

Net Promoter Score

2020

2019

2020

2019

25,719

36,897

52

42

Net Loans and

Non Performing Loans

Customer

Total Employee

Advances (KShs. Million)

(KShs. Million)

Complaints

Benefits (KShs. M)

2020

2020

2020

2020

595,255

96,613

836,968

20,511

2019

2019

2019

2019

539,747

66,201

980,443

19,459

Customer Deposits

Dividends

Reduction in Greenhouse

Reams of

(KShs. Million)

(KShs. Million)

Gas emissions

paper used

2020

2020

2020

2020

767,224

3,213

23%

53,557

2019

2019

2019

2019

686,583

11,099

7%

58,611

Total debt / Total

Market Capitalization

Water use

equity

(KShs. Million)

2020

2020

2020

26.0%

122,433

147M litres

2019

2019

2019

16.6%

173,527

142M litres

Return on Average

Cost to Income Ratio

Female/Male

Equity

2020

Ratio

2020

2020

14.4%

45.4%

45:55

2019

2019

2019

20.7%

45.9%

44:56

Electricity

Consumption at

Kencom Head Office

(Million Kwh)

2020 2019

3.09 3.26

Number of staff health and safety incidences (in the work place)

2020

2019

3

4

INTEGRATED REPORT & FINANCIAL STATEMENTS

5

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Disclaimer

KCB Group Ltd. published this content on 05 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 May 2021 16:18:04 UTC.