Banks profit hit record Sh240bn despite ‘tough economic times’

KENYA’S listed banks have posted a combined net profit of Sh240.1 billion for the year ended December 2024, setting a new record despite a tough economic environment, occasioned by increased bad loans.

The record performance, however, comes at a time that commercial banks reported a drop in lending last year.

The high interest rates saw Kenyans shy away from costly loans amid an economic downturn that limited their ability to borrow.

This comes despite the Central Bank of Kenya (CBK) reducing the base lending rate from 13 per cent in June last year to 10.75 per cent last month in anticipation that banks will pass on the benefits to their customers.

The banks’ earnings were however not impacted by the happenings in the fiscal space.

Among the top performers is KCB Group, which reported the highest net profit at Sh61.8 billion—representing a 64.9 percent jump from the previous year.

This saw the lender propose a total dividend of Sh3 per share, amounting to Sh9.6 billion in payouts. KCB Group Chairman Joseph Kinyua, maintained that despite the doubling of the profits the bank is continually ring-fencing its business by preserving capital and containing costs for long-term sustainability.

“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,” said Kinyua.

Equity Group followed closely with a profit of Sh48.8 billion with the bank plans to distribute Sh16 billion in dividends, up from Sh15.1 billion in the prior year.

According to the lender, the dividend will be payable to shareholders on the register as of May 23 Co-operative Bank of Kenya recorded a net profit of Sh25.5 billion, a 9.8 percent increase, and maintained its dividend at Sh1.50 per share, translating to a payout of Sh8.8 billion.

NCBA Group posted a modest 1.9 percent rise in profit to Sh21.86 billion. However, it still raised its dividend by 15.8 percent to Sh5.50 per share, totaling Sh9.06 billion— the fourth consecutive year of dividend growth.

Among the big winners are the billionaire Kenyatta and Ndegwa families, who are among the major beneficiaries of NCBA’s generous cash distribution.

“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 listed lender stated during the release of its financials.

Absa Bank Kenya saw its profits soar by 27.5 percent to Sh20.87 billion and raised its dividend payout to Sh1.75 per share, amounting to Sh9.5 billion.

Standard Chartered Bank Kenya delivered the most generous dividend relative to share value, declaring a total of Sh45 per share.

This follows a 45 percent jump in profit to Sh20.1 billion, translating to a record Sh13.9 billion dividend payout I&M Group grew its net profit by 21.9 percent to Sh15.3 billion, boosting its total dividend payout to Sh5 billion or Sh3 per share—a 17.6 percent increase.

Stanbic Holdings posted a record net profit of Sh13.71 billion, up 12.8 percent. The bank increased its dividend payout by 35.1 percent to Sh8.1 billion, continuing a three-year streak of rising dividends.