Genghis Capital - KCB Group Ltd (KCB) KCB Group Plc (NSE: KCB) FY19 Earnings Note

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Genghis Capital

Gerald Muriuki

KCB Group Plc (NSE: KCB) FY19 Earnings Note

KCB Group Plc (NSE: KCB) released FY19 results reporting a 5.0% y/y increase in Earnings per Share (EPS) to KES 7.86. The performance was, in part, attributed to a 184.0% y/y increase in Loan loss provision (LLP) to KES 8.9Bn. Net Interest Income (NII) grew 2.3% y/y to KES 56.1Bn while Non-interest Revenue (NIR) recorded robust growth of 12.8% y/y to KES 28.2Bn. Other operating expenses were subdued (-9.1% y/y) as staff costs declined 6.8% y/y. The balance sheet grew 8.4% y/y to KES 898.6Bn, driven by the 7.9% y/y rise in deposits to KES 686.6Bn, coupled with the 6.3% y/y rise in the loan book to KES 535.4Bn. Government securities grew modestly at 1.7% y/y to KES 169.2Bn. Final dividend has been maintained at KES 2.50 per share (total DPS of KES 3.50, representing a dividend yield of 7.2%), with books closure on 27^th April 2020. We maintain our long-term BUY recommendation on KCB with a fair value estimate of KES 62.25, representing a potential upside of 27.9%.

12/03/2020 4 EN

Underlying

KCB Group Ltd

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KE0000000315 Nairobi Securities Exchange Kenya

Provider

Genghis Capital

Genghis Capital is an innovative and customer focused Investment Bank licensed by the Capital Markets Authority (CMA). Founded in 2008, Genghis is one of the leading investment banks in Kenya. Since its establishment, Genghis has achieved tremendous growth to offer a well-diversified portfolio of financial services that includes:

i. Securities(Equity/Debt) Trading
ii. Research
iii. Wealth Management services
iv. Investment Advisory & Management via the GenCap Unit Trusts
v. Corporate Finance & Transaction Advisory services

The Kenyan Capital Markets continue to develop in size, scope and sophistication. With this is an increasing demand for more specialized and personalized brokerage service and we at Genghis Capital are glad to be able to offer you this service. Our strength lies in ensuring our clients are up to speed with developments at the stock market and the economy. Research and technology remains our competitive and comparative advantage hence Experience, Expertise and Professionalism are some of the qualities you can expect from our team.

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Analysts

Gerald Muriuki

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KCB Group Plc (NSE: KCB) FY19 Earnings Note

Kenya Banks: Sector Q3 21 PBT jumps 68% yoy, and outlook for Q4 is positive too

Kenya banks: Lucrative SME potential undercut by low yields and asset quality

Kenya Commercial Bank: 9M 21 – impressive results and management's 2023 strategy is now within reach

Genghis Cross-Asset Weekly Strategy - 8th February 2021

East African Breweries Ltd (NSE: EABL) 1H21 Earnings Note

KenGen Company Plc (NSE: KEGN) FY20 Earnings Note

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