KCB Group has bounced back as East and Central Africa’s lender by assets, as Co-operative Bank reported its best-ever six-month performance, underlining the resilience of Kenya’s banking sector.
KCB’s assets surged 16.8 per cent to Sh2.3 trillion, helped by double-digit growth in deposits and lending, while Co-op Bank’s net profit jumped 28 percent to Sh18 billion in the six months to June.
The contrasting scale of the two lenders was evident in their balance sheets, but both benefited from stronger loan growth, improving asset quality and disciplined cost management.
KCB’s customer deposits rose 15.1 per cent to Sh1.7 trillion, while gross loans increased 14.2 per cent to Sh1.3 trillion.
The lender attributed the expansion in lending to new customer acquisition and deeper relationships with existing customers across the retail, small and medium-sized enterprises and corporate segments.
KCB Group PLC reported Sh36.9 billion in profit after tax for the first half of 2026, a 14 per cent rise, on strong income growth and discipline in cost management.
The stronger balance sheet translated into a 20.8 per cent increase in net profit to Sh49.3 billion.
Group total income grew 9.5 per cent to Sh108.1 billion, with non-funded income rising 15.4 percent to Sh34.1 billion and funded income increasing seven percent to Sh74 billion.
KCB’s regional subsidiaries remained an important pillar of the group, contributing 27.7 per cent of profit before tax and accounting for 31.1 per cent of the group’s total balance sheet.
Its non-banking businesses also recorded significant growth.
KCB Investment Bank’s profit before tax surged 226.6 per cent to Sh503.2 million, supported by increased advisory mandates and capital markets transactions.
KCB Corporate Trustee Services posted a 79.8 percent increase in profit before tax to Sh142.5 million, while KCB Bancassurance Intermediary contributed Sh335.4 million.
The bank also made progress in cleaning up its loan book.
Gross non-performing loans fell by Sh17.3 billion to Sh203.8 billion from Sh221.1 billion a year earlier, reducing the NPL ratio to 15.1 per cent from 18.7 per cent.
The improvement in asset quality, combined with stronger earnings, enabled KCB’s board to recommend an interim dividend of Sh3 per share, a 50 per cent increase from the Sh2 paid a year earlier.
The payout will amount to Sh9.64 billion.
KCB Group chief executive Paul Russo said the performance demonstrated the resilience of the group’s diversified business model and the confidence of its customers.
At Co-op Bank, the story was equally strong despite the lender’s smaller balance sheet.
Net profit rose from Sh14.1 billion to Sh18 billion, while profit before tax increased 17.3 per cent to Sh23.1 billion.
The record performance was driven largely by an 18.1 per cent expansion in net loans and advances to Sh462.2 billion.
The larger loan book lifted net interest income by 13 per cent to Sh33.2 billion, while total operating income grew 12.5 per cent to Sh48.9 billion.
Co-op Bank also benefited from stronger asset quality.
Its NPL ratio declined to 13.9 per cent from 17.2 per cent, while the cost of risk improved to 1.8 per cent from 2.4 per cent, helping contain provisions and support profitability.
Customer deposits grew 11.2 per cent to Sh623.2 billion, providing additional capacity for lending and investment.
Total assets increased 7.1 per cent to Sh869.5 billion, while shareholders’ funds rose 9.4 per cent to Sh171 billion.
The lender maintained cost discipline, with operating expenses increasing 9.2 per cent, slower than the growth in operating income. Its cost-to-income ratio before provisions stood at 46 per cent.
Co-op Bank’s subsidiaries also strengthened their contribution.
Kingdom Bank’s profit before tax rose 77.8 per cent to Sh873 million, while Co-optrust Investment Services recorded a 77.5 per cent increase to Sh640.5 million.
Co-op Bank of South Sudan increased profit before tax to Sh224 million from Sh56.9 million, while Kingdom Securities posted a 23.3 per cent rise to Sh77.9 million.
Digital channels continued to reshape the group’s operations, with more than 90 percent of customer transactions processed outside traditional branches. Agency-generated deposits increased 8.7 percent to Sh92.5 billion, while digital E-Credit disbursements reached Sh40.4 billion.
The two banks’ results point to a broader shift in Kenya’s banking industry towards larger, more diversified balance sheets, digital delivery and tighter management of credit risks.
The impressive half year performance by the two banks saw their share prices rise marginally at the Nairobi Securities Exchange (NSE), with KCB hitting a high of Sh86.25 compared to Sh85.50 on Tuesday.
The share price has gained 30 per cent since January when it was selling at Sh65.50.
Co-op Bank on the other hand was trading at Sh37 up from Sh36.45 the previous day. The share price has gained 55 per cent since January when it was trading at Sh23.75.
