KCB Group has posted a KES 24.4 billion pre-tax profit for the three months to March 2026, up 15% from KES 21.2 billion in the same quarter last year. After tax, the lender made KES 18.2 billion, a 10% increase. Earnings per share rose to KES 22.18 from KES 20.03.
The headline numbers are solid, but the more interesting story is in the mix.
For years, KCB’s growth story was a Kenyan story with a few regional add-ons. That balance has shifted. Subsidiaries outside KCB Bank Kenya now contribute 29% of group pre-tax profit and 31.5% of the balance sheet. Excluding the impact of selling National Bank of Kenya to Access Bank in May 2025, pre-tax profit grew 17% year on year, and operating income grew 16%. The group is doing more business, in more places, with fewer of the legacy drags it has been carrying for years.
Where the money came from
Total operating income grew 8.5% to KES 53.6 billion. Two engines pulled the train.
The first is net interest income, which rose 9% to KES 36.6 billion. That happened despite central banks across the region cutting benchmark rates, which usually compresses what banks earn on loans. KCB offset the squeeze by lending more. Net loans grew 18.6% to KES 1.21 trillion, and the cost of funds dropped to 3.3% as customer deposits surged 16% to KES 1.65 trillion. Cheaper deposits and a bigger loan book is the classic recipe for protecting margins when rates are falling.
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The second engine is non-funded income, up 8% to KES 17 billion. Lending fees jumped 27% on the back of higher loan volumes, and foreign exchange income grew 14%. Notably, service fees actually dipped 2%, suggesting growth came from real activity rather than from squeezing existing customers harder.
Mobile lending is now the spine of retail credit
The most striking operational number sits in the investor presentation: mobile loan disbursements reached KES 151 billion in the quarter, up 25%. That works out to roughly KES 1.7 billion every single day, weekends included. For a bank whose digital channels already handle 99% of transactions, this is the new normal of retail banking in Kenya. Branches are now largely for high-value, complex business; the phone does the rest.
This is also the context for KCB’s recent decision to introduce a KES 20 flat fee on Pesalink transfers, with anything below KES 1,000 going through free. When you are pushing KES 1.7 billion a day in mobile lending, making the rails that carry that money cheaper is a defensive move as much as a customer-friendly one.
Asset quality is finally turning the corner
KCB has had a difficult few years on bad loans. The non-performing loans (NPL) ratio peaked at 19.3% in Q1 2025. It has now dropped for four straight quarters to 16.6%, with the absolute stock of bad loans down to KES 217.8 billion from KES 233.3 billion. KCB Bank Kenya remains the laggard at 19.8%, and Trust Merchant Bank in the DRC sits at 15.3%, but every other subsidiary is below 7%.
Trade and manufacturing remain the strained sectors, contributing 14.8% and 17.8% of bad loans respectively. Personal and household lending, which is 27% of the book, has improved to a 9.1% NPL ratio. That matters because it is the segment most directly tied to mobile lending growth.
The Pesapal piece, and what to watch next
The presentation confirms that the minority stake acquisition in Pesapal is still working through regulatory approvals. We already unpacked why this matters: combined with the Riverbank Solutions majority stake, KCB is assembling the full payments stack around its SME lending book. Real-time merchant data plus a balance sheet equals pre-approved credit pushed to the terminal.
Two macro risks are flagged repeatedly. Group Chairman Joseph Kinyua and CEO Paul Russo both pointed to the Middle East conflict as a counterforce on commodity prices, inflation expectations, remittances, and credit demand. KCB has also flagged that asset yields will keep falling, with management guiding 11.0% to 11.2% for the year against 10.4% actual in Q1, meaning income growth depends on continuing to grow the loan book faster than yields compress.
For investors, the share is trading above most fair-value estimates after a strong run, and full-year guidance now sits within reach on most metrics: deposits already at 15.7% growth against 9-11% guidance, loans at 18.6% against 10-11%, and return on equity at 21.5%, comfortably inside the 20-22% target.
The takeaway is straightforward. KCB is a different bank than the one that limped through 2023 carrying NBK and a 19%-plus NPL ratio. The bet on regional subsidiaries and digital lending is paying off in numbers that are getting harder to argue with.
