Slide 1: Q3 2024 Investor Presentation
Q3 2024 Investor Presentation Nairobi, 20 November 2024 Regulated by the Central Bank of Kenya
Slide 2: We are
We are >Business Update Financial Performance Appendices For People. For Better.
Slide 3: Well diversified business model
Well diversified business model. Q3 2024 Investor Presentation KCB That matches the meaningful role we play in the region and supports our aspiration to do more. (Res BankKenya} PO | — Ethiopia Rep Office 100% Brussels Rep Office ONES 9 LNL For People. For Better. | National Bank of Kenya, —TOO% —__
Slide 4: Bar graph with upward trend with solid fill
Bar graph with upward trend with solid fill
Slide 5: Sound corporate governance structure that safeguards value
Sound corporate governance structure that safeguards value. Clearly defined governance structure which provides for oversight, delegation & clear lines of authority. Q3 2024 Investor Presentation KCB Accountable to shareholders ( Shareholders >} | } For People. For Better. (a BOARD OF DIRECTORS 11 D
Slide 6: Our Group Executive Committee
Q3 2024 Investor Presentation Our Group Executive Committee. Ensures KCB remains well positioned & responsive to opportunities across the region for growth. la da a @ A\ Paul Russo, EBS Lawrence Kimathi Annastacia Kimtai Cosmas Kimario Japheth Achola Bonnie Okumu Group Chief Executive Group Finance
Slide 7: Subsidiary Managing Directors
Q3 2024 Investor Presentation Subsidiary Managing Directors. Ensure KCB remains well positioned & responsive to opportunities across the region for growth. hoe i da Annastacia Kimtai Oliver Meisenberg George Odhiambo Patience Mutesi Cosmas Kimario Edgar Byamah Managing Director, Managing Director, M
Slide 8: Operating environment: GDP growth
Operating environment. Q3 2024 Investor Presentation We are well positioned to tap on the strong projected GDP growth across the region in 2024. Real GDP growth rates 8.2% 5.1% 4.6% 5.6% 8.4% Rwanda Tanzania Uganda Kenya DRC Burundi 2023 ™i2024 proj For People. For Better. South Sudan GDP growth dri
Slide 9: Operating environment: interest rates and inflation
Q3 2024 Investor Presentation KCB Operating environment. Higher-for-longer interest rates while inflation starts to drop across the region in 2024. Central Bank rates and cost of funding Inflation rates across the region 26.8% 21.9% 18.4% 6.8% 3.8% i ae 3.3% 9.7% DRC = South Kenya = Burundi Uganda R
Slide 10: Operating environment: currencies vs USD
Q3 2024 Investor Presentation Operating environment. Kenya and Uganda shillings continue to strengthen against the US dollar in 2024. Movement of local currencies vs USD in 9 months to September 2024 Strengthening of the South Kenya shilling on the . . ¥ back of improved supply Kenya Uganda Burundi
Slide 11: Operating environment: Kenya current account deficit
Q3 2024 Investor Presentation Operating environment. Kenya’s current account deficit stable at 3.8% of GDP in the 12 months to August 2024. > Import of goods increased by 7.3% while exports grew at a faster pace by 14.4% in the first eight months of 2024 compared to a similar period in 2023. Kenya c
Slide 12: Our 2024 - 2026 strategy: Transforming Today Together
Q3 2024 Investor Presentation Our 2024 - 2026 strategy: Transforming Today Together. Hinged on putting customers first and delivering sustainable returns for our shareholders. 12 PILLARS ENABLERS KCB Transforming GROUP Today STRATEGY Together For People. For Better. Customer-Centered soe ® Digital O
Slide 13: Strategic pillar 1: Customer-centered value propositions
Q3 2024 Investor Presentation KCB Strategic pillar 1: Customer-centered value propositions. We have continued to embed customer obsession & rollout strong customer value propositions. FLME continues to bridge barriers to financing R : - Offers more unsecured lending to address collateral challenges.
Slide 14: Strategic pillar 2: Leverage Group capabilities for efficient scale
Q3 2024 Investor Presentation KCB Strategic pillar 2: Leverage Group capabilities for efficient scale. Supported by technology evolution through building future-ready capabilities. Sustained improvement in efficiencies -47.4% cost-income ratio in Q3 2024. Down 450bps from 51.9% in Q3 2023. -Positive
Slide 15: CASE IN POINT: Trust Merchant Bank
CASE IN POINT: Trust Merchant Bank. Commenced core banking upgrade and sustained loan growth. A10% Growth in TMB’s net loans and advances driven by increased lending to mining, transport, personal and agriculture sectors. For People. For Better. Selected balance sheet and income lines (Ksh B) 91.0 Y
Slide 16: CASE IN POINT: BPR Bank Rwanda
Q3 2024 Investor Presentation CASE IN POINT: BPR Bank Rwanda. Completed core banking upgrade and made progress in channels optimization. Selected balance sheet and income lines (KshB) Selected key ratios Vv 3 8 2.4 an 21.8% Number of branches and = 9.6% — outlets down by 38 to 74 in a] Q3 2024. Furt
Slide 17: CASE IN POINT: KCB Bank Tanzania
Q3 2024 Investor Presentation CASE IN POINT: KCB Bank Tanzania. Enhanced customer value propositions driving business growth. Selected balance sheet and income li hB) Selected key ratios Improved MSME, SAHL and digital value propositions and expanded retail footprint with the opening of an additiona
Slide 18: Strategic pillar 3: Digital leadership
Q3 2024 Investor Presentation KCB Strategic pillar 3: Digital leadership. Enhanced self-serve capabilities continue to drive utilization of digital channels. Number of non-branch channel transactions in Q3 2024 (M) Value transacted through digital channels in Q3 2024 (Ksh B) _YoYchange YoYchange YoY
Slide 19: Strategic pillar 4: Optimize data and analytics
Strategic pillar 4: Optimize data and analytics. Q3 2024 Investor Presentation To drive customer obsession, enhance our solutions and increase uptake of products. Driving deposit mobilization through analysis of key insights For People. For Better. Lending Ksh. 1 billion per day on mobile. Improved
Slide 20: Value created through diligent execution of our strategy in Q3 2024
Q3 2024 Investor Presentation KCB Value created through diligent execution of our strategy in Q3 2024. Delivered strong shareholder value and enhanced employee value proposition. For our investors > Grew shareholder's equity by 14% to Ksh 249 billion. > Improved earnings per share by 49% to Ksh 18.9
Slide 21: A green and blue logo Description automatically generated
A green and blue logo Description automatically generated
Slide 22: We champion the creation of shared value
We champion the creation of shared value. Our Foundation programmes deliver social and economic impact in our communities. Q3 2024 Investor Presentation Qiajiri -Creating employment opportunities for young people in the countries that KCB operates in. -4,880 beneficiaries recruited for training in 2
Slide 23: We have consistently ranked among the leading financial institutions
Q3 2024 Investor Presentation We have consistently ranked among the leading financial institutions in the continent. KCB Group is ranked at position 19 in Africa, on The Banker’s Top 1,000 World Banks. Our subsidiaries won The Banker awards for Bank of the year 2023 In Kenya and DRC For People. For
Slide 24: Financial Performance
We are CONNIE Business Update > Financial Performance Appendices For People. For Better.
Slide 25: Ksh 2.0 trillion balance sheet
Q3 2024 Investor Presentation Ksh 2.0 trillion balance sheet; growth netted down by appreciation of reporting currency. Largest balance sheet in the region enabling businesses and facilitating trade. V5% Decline in total assets. Impacted by the appreciation of Kenya shilling against regional currenc
Slide 26: Steady contribution from regional businesses to total assets
Q3 2024 Investor Presentation Steady contribution from regional businesses to the Group’s total assets. Robust asset growth in Uganda and Burundi partially offset by impact of Ksh appreciation Total assets distribution YoY Change 33.7% mw KCB Kenya (6%) Proportion of assets in subsidiaries outside o
Slide 27: Gross loans growth Staging of gross loans
Gross loans growth Staging of gross loans 187 215
Slide 28: Contribution to net loans from regional subsidiaries
Q3 2024 Investor Presentation Contribution to net loans from regional subsidiaries continues to grow. Resilient growth in TMB, Uganda and Burundi served to offset impact of appreciation of Ksh. Net loans and advances distribution YoY Change 31.0% akcBkere Proportion of net loans and advances in subs
Slide 29: Group NPL ratio flat at 18.5% QoQ
Group NPL ratio flat at 18.5% QoQ. Q3 2024 Investor Presentation KCB Ratio up 210bps YoY on downgrades mainly in agriculture, construction and trade sectors. Group NPL stock and ratio 16% - 18% Target Group NPL ratio by 187.0 221 end of 2024. Various NPL ao resolution strategies in 149.3 oe progress
Slide 30: YoY growth in NPL stock mainly driven by Kenya businesses
Q3 2024 Investor Presentation YoY growth in NPL stock mainly driven by Kenya businesses. Focus remains on NPL resolution especially in KCB Bank Kenya. Movement in NPL stock per subsidiary (Ksh million) 7719 114 7 81 —128—_ 215,303 187,042 Q3 23 KCB Bank NBK TMB KCB Bank KCBBank KCBBank KCBBank BPR B
Slide 31: KCB Kenya Corporate book NPL ratio
Q3 2024 Investor Presentation KCB Kenya Corporate book NPL ratio down 230 bps in the third quarter of 2024. Retail segment strained in 2024 due to high interest rates and reduction in disposal incomes. KCBK NPL ratios per segment KCBK NPL ratios per currency 18.4% Local currency loan book NPL ratio
Slide 32: KCB's largest sector has single digit NPL ratio
Q3 2024 Investor Presentation KCB’s largest sector has single digit NPL ratio. The major strained sectors are manufacturing, real estate, trade & construction. Contribution to Grossloans Sector NPL ratio Contribution to NPL stock Mining and Quarrying 1.4% I 0.4% 0.0% Energy and Water 2.6% BD «22.5%
Slide 33: Cost of risk flat at 2.2%
Q3 2024 Investor Presentation Cost of risk flat at 2.2% on net-off between new provisions and FX impact. Increase in impairment charge driven by KCB Bank Kenya, BPR and Uganda. Impairment and Cost of Risk Evolution of impairment charge 19 v. 8 15.8 Uae Q3 22 Q3 23 Q3 24 Q323 KCB BPR KCB KCBS Others*
Slide 34: Increase in provisions charge to build coverage
Q3 2024 Investor Presentation Increase in provisions charge to build coverage towards the 60% target. Taking measures to maintain adequate coverage both from provisions and securities held. KCB Group Coverage ratios The non-performing loan book has full coverage from IFRS Coverage Regulatory Coverag
Slide 35: Customer deposits steady at Ksh 1.5 trillion
Q3 2024 Investor Presentation Customer deposits steady at Ksh 1.5 trillion in 2024. 7% YOY decrease in customer deposits driven by appreciation of Ksh & ceding market share for G2G. Growth in customer deposits (Ksh B) Deposits by type 47.2% O82 62% 6% Liquidity ratio in Q3 2024. The ratio has held s
Slide 36: Regional contribution to total customer deposits
Q3 2024 Investor Presentation Steady contribution from regional businesses to total customer deposits. Impact of Ksh appreciation moderated by growth in Uganda, Burundi and Tanzania. Customer deposits distribution YoY Change 32.7% m KCB Kenya (8%) Proportion of customer fq See 10%) deposits in subsi
Slide 37: We delivered a strong growth in revenue
Q3 2024 Investor Presentation KCB We delivered a strong growth in revenue. From new business lines, deepening of digital channels and innovative customer value propositions. A22% Increase in revenue driven by interest income from customer loans, government securities & placements coupled with NFI gr
Slide 38: All our subsidiaries registered strong growth in revenues
Q3 2024 Investor Presentation KCB All our subsidiaries registered strong growth in revenues. Revenue from subsidiaries outside of KCB Bank Kenya grew by 16% to Ksh. 52.7B. Total income contribution per subsidiary YoY Change 37.3% e ° m KCB Kenya 24% Share of revenue from subsidiaries outside of KCB
Slide 39: Net interest margin up 25bps
Q3 2024 Investor Presentation Net interest margin up 25bps on improved asset yield which netted off the rise in cost of funds. Uptick in asset yield driven by implementation of risk-based pricing and high market rates. Loans and government securities Yields vs cost of funds Interest rates trend 10.8
Slide 40: Operating costs grew slower than revenues
Q3 2024 Investor Presentation Operating costs grew slower than revenues resulting in positive jaws. Growth in operating costs driven by customer acquisition activities and investments in technology. A11.4% 519% sna Growth in operating 27 —(05)-— oo) a expenses. 9 Growth in staff costs 22.7% 20.5% dr
Slide 41: Group PAT increased by 49% to Ksh 45.8 billion
Q3 2024 Investor Presentation KCB Group PAT increased by 49% to Ksh 45.8 billion in Q3 2024. Supported by growth in revenue lines and improved efficiencies across all businesses. A24% Growth in net interest income. Driven by increase in earning assets, rise in rates and implementation of risk-based
Slide 42: All our subsidiaries registered strong growth in profit
Q3 2024 Investor Presentation All our subsidiaries registered strong growth in profit. PAT from subsidiaries outside of KCB Bank Kenya grew by 98% to Ksh. 18.4B. ° PAT contribution per subsidiary YoY Change 36.6 % m KCB Kenya 32% Share of PAT from subsidiaries outside of KCB a TMB 47% Bank Kenya, up
Slide 43: Sustained improvement in Return on Equity
Q3 2024 Investor Presentation KCB Sustained improvement in Return on Equity across our businesses. 570 bps improvement in Group RoE on improved profitability. Return on Equity 145.6% mQ323 = Q324 1 i i I ' fl 1 I I I i i I ' fl 1 I I I i i I ' I T I ' 1 t t { 9 25.6% a to wok sa 20.7% 21.8% 21.9% Bl
Slide 44: Adequate capital to drive growth of risk weighted assets
Q3 2024 Investor Presentation Adequate capital to drive growth of risk weighted assets. KCB Bank Kenya core capital buffers above our internal minimum at 300bps. Subsidiaries core capital ratio 26.9% Subsidiaries total capital ratio 23.2% 24.4% 21.7% 20.6% 15.6% o, (11.0% 16.7% 13.1% 15.1% 13.2% 16.
Slide 45: Profitability and efficiency ratios in line with guidance
Q3 2024 Investor Presentation KCB Profitability and efficiency ratios in line with guidance. High cost of funding impacted net interest margins. Resolving NPLs remains a key focus area. Outlook Revised Outlook Increase in cost of funds NFI Ratio 33%-34% 35.1% Not revised driven by rise in interest _
Slide 46: Appendices
Business Update Financial Performance > Appendices For People. For Better.
Slide 47: Overview of Key Financial Ratios
Overview of Key Financial Ratios KCB GROUP Return on average equity Q3 2024 Investor Presentation Q3 2024 KCB Kenya KCB Group 28.0% Cost to income 38.7% IGross NPL to gross loans 20.7% NPL regulatory coverage 65.8% Debt to equity 28.3% Non funded income (NFI) to total income 32.4% Mobile NFI to tota
Slide 48: Summary Statement of Financial Position as at September 2024
Q3 2024 Investor Presentation Summary Statement of Financial Position as at 30 September 2024 KCB Group KCB Bank Kenya .. Y-0-Y Ksh Billion Q3 23 Q3 24 Change Y-O-Y 3 23 3 24 @ o Change Cash and balances with central bank 104.0 84.1 (19%) 74.2 60.1 (19%) Balances with other institutions 426.0 333.7
Slide 49: Summary Statement of Profit or Loss, Nine Months to 30 Sep 2024
Q3 2024 Investor Presentation KCB Summary Statement of Profit or Loss for the Nine Months Ended 30 Sep 2024 KCB Group KCB Bank Kenya Ksh Billion @323@324 Q323 Q324 Interest income 113.9 149.0 74.8 102.0 Interest expense (39.1) (56.2) (27.6) (42.2) Net interest income 74.9 92.8 471 59.8 Foreign excha
Slide 50: Key Operating Data
Q3 2024 Investor Presentation Q3 2023 FY 2023 Q2 2024 Key Operating Data KCB Footprint Branches Number of customers (million) ATMs! Agency outlets? POS/Merchant outlets? Vooma merchants outlets (thousands) Total number of employees KCB Share Information Earnings per share (Ksh) Dividend per share (K
Slide 51: KCB Regional Footprint and Key Macros
KCB Regional Footprint and Key Macros as at 30 September 2024 Q3 2024 Investor Presentation KCB Kenya! Tanzania South Sudan Rwanda Uganda Burundi DRCongo KCB Footprint Branches 294 7 16 74 13 8 106 Number of customers (thousands) 29,705 64 156 427 121 64 2,398 ATMs 569 19 14 58 15 8 96 Agency outlet
Slide 52: A green and blue logo Description automatically generated
A green and blue logo Description automatically generated
Slide 53: Registered office and company information
Registeredoffice KCBGroupPic Kencom HouseM oi Avenue PO Box48400- 00100 ' Nairobi,Kenya : Contactinformation ' KCB Investor Relations : investorrelations@kcber m : www.kcbgroup.com For People. For Better. Q3 2024 Investor Presentation KCB Company information Stocklisting / Auditors Primary | Pricewa
Slide 54: Thank You
Z Thank You For People. For Better. KCB Investor Relations investorrelations@kcbgroup.com