7 Top-Performing Kenyan Banks in the First Half of 2021

Like most businesses, banks were deeply affected by the Covid-19 pandemic. But as the Kenyan economy continues to recover so has the banks.

The following banks registered some of the most impressive growth in the last 6 months.

Absa Bank Kenya

Absa Bank Kenya reported a staggering 846% rise in profits to Ksh 5.6 billion compared to Ksh 588.9 billion in the same period in 2020.

The bank’s total income grew by 6% to Ksh 17.8 billion mainly driven by the growth of net interest income, which was up 6% year on year on the back of increased lending. Customer assets increased by 8% to Ksh 219 billion with total assets at Ksh 398 billion.

The 6% growth in customer deposits was attributed to transactional accounts which contributed 68% of the total deposits.

No interim dividend was declared. Read full financial result here

KCB Group

KCB Group reported a 102% rise in profits to Ksh 15.3 billion, up from Ksh 7.6 billion recorded for the same period in 2020.

Interest income, increased by 14% to Ksh 47.1 billion from Ksh 41.4 billion. Non-interest income, comprised of fees and commissions on loans and advances, foreign exchange trading income, dividend income, and other income, grew by 6% to Ksh 14.8 billion from Ksh 13.96 billion.

All the bank’s subsidiaries contributed to a 54% growth in profit before tax. Total contribution to profit-before-tax from the subsidiaries outside of Kenya stood at 15.2%.

The bank is in the process of acquiring subsidiaries in Rwanda and Tanzania.

No interim dividend was declared. Read the full financial statement here

Equity Group

Equity Group reported a 98% rise in profits to Ksh 17.9 billion, up from Ksh 9.1 billion recorded for the same period in 2020.

The bank’s deposits grew 51% growth to Ksh 820.3 billion up from Ksh 543.9 billion, while long term borrowed funds grew by 78% to Ksh.102.3 billion up from Ksh 57.6 billion. Net Loans and advances grew by 29% to Ksh 504.8 billion up from Ksh 391.6 billion.

Investment in Government securities grew by 46% to Ksh 315.5 billion up from Kshs 216.4 billion resulting in 50% growth in Total Assets to Ksh 1.12 trillion up from Ksh 746.5 billion

No interim dividend was declared but investors can expect a dividend payout later in the financial year.

This will be the first time Equity will payout dividends in two years as the bank had previously reinvested its shareholder earnings to help it weather the adverse effects of the covid-19 pandemic on loan performance and capital buffers.

Read the full report here

NCBA Group

NCBA Group reported a 77% rise in profits to Ksh 4.66 billion, up from Ksh 2.63 billion recorded for the same period in 2020.

Growth in profitability was attributed to an increase in operating income by Ksh 2.8 billion, driven by higher customer activity and a decline in loan impairment charges by Ksh 1.7 billion.

Total operating expenses were down to Ksh 16.3 billion from Ksh 17 billion with credit impairment charges falling by 22.4 per cent to Ksh 5.9 billion.

Net interest income grew by 19.7% to Ksh 13.4 billion on gains from investment in government securities amid a contraction of its loan book to Ksh 239.6 billion.

The bank declared an interim dividend of Ksh 0.75 per share to be paid on October 12 to shareholders who will be on the register as of September 28.

You can read the full financial result here

Standard Chartered Bank Kenya

Standard Chartered Bank Kenya reported a 50.9% rise in profits to Ksh 4.8 billion, up from Ksh 3.2 billion recorded for the same period in 2020.

Profit before tax recovered strongly from last year, helped by strong underlying business momentum, improved loan impairments and operating cost efficiencies.

Customer deposits were up from Ksh 256.5 billion to Ksh 278.2 billion. Net Interest Income, which largely comes from loans and advances, fell from Ksh 9.4 billion to Ksh 9.1 billion driven by lower average yields despite the loan book expanding seven percent to Sh130.28 billion.

No interim dividend was declared. See full financial result here

Stanbic Bank Kenya

Stanbic Bank Kenya reported a 37%% rise in profits to Ksh 3.5 billion, up from Ksh 2.6 billion recorded for the same period in 2020.

Net interest and non-interest income rose by 9.5% and 10% respectively to Sh6.9 billion and Sh5.5 billion.

Total income rose by 9.7% to Ksh 12.4 billion compared to Ksh 11.3 billion it recorded in June 2020.

The bank declared an interim dividend of Ksh1.70 per share to its shareholders to be paid latest on September 27, 2021.

See full financial result here

I&M Group

I&M Group reported a 33% rise in profits to Ksh 4.2 billion, up from Ksh 3.2 billion recorded for the same period in 2020.

Total Assets rose 12% to Ksh 382.6 billion up from Ksh 340.6 billion bolstered by expansion into Uganda and increased private and public sector lending. The acquisition of Orient Bank Ltd (OBL) in Uganda has expanded the Group’s balance sheet by Ksh 23.5 billion.

Net interest income rose 28% to Ksh 8.9 billion up from Ksh6.9 billion attributed to increased interest income from government securities. Non-Funded Income reduced by 6% to Ksh 3.9 billion from Ksh4.2 billion.

No interim dividend was declared. You can read the full report here

What this means to you

A number of these banks have been responsible for the recent share price rally at the Nairobi Securities Exchange (NSE) because of their impressive profits.

Their performance has made them quite attractive to investors at the NSE. So if you are looking to buy shares, either for short-term profit or to earn dividends, you may want to consider some of these banks.

If you don’t know much about trading in shares in the NSE or you want to know how to start, read this article I wrote to help you get started.