Following the release of the FY’2022 results by the Nairobi Securities Exchange (NSE) listed banks, we performed an analysis on the financial performance of these ten banks and identified the key factors that shaped the performance of the sector.
The Core Earnings per Share (EPS) for the listed banks recorded a weighted growth of 26.6% in FY’2022, compared to a weighted growth of 82.9% recorded in FY’2021.
The performance indicates the banking sector’s continued resilience despite the tough operating business environment occasioned by elevated inflationary pressures.
The performance in FY’2022 was mainly attributable to a 31.6% growth in non-funded income coupled with a 19.2% growth in net interest income.
Additionally, the listed banks’ Asset Quality improved with the weighted average Non-Performing Loan (NPL) ratio declining by 0.6% points to 11.7% in FY’2022, from 12.3% in FY’2021.
Despite this improvement in asset quality, the NPL ratio remains higher than the 10-year average of 8.8%.
Equity Bank
EPS increased by 15.1% to Ksh.12.2 in FY’2022, from Ksh.10.6 recorded in FY’2021. The performance was driven by a 28.7% growth in total operating income to Ksh.145.9 billion, from Ksh.113.4 billion in FY 2021.
However, the performance was weighed down by the 40.0% growth in total operating expenses to Kshs 86.1 bn, from Kshs 61.5 bn in FY’2021,
KCB Group
Core earnings per share rose by 19.5% to Ksh.12.7 from Ksh.10.6 in FY’2021, with the variance stemming from the 19.6% increase in total operating income. The performance was driven by the 19.6% growth in total operating income to Ksh.129.9 billion, from Ksh.108.6 billion in FY’2021, which outpaced the 19.3% growth in total operating expenses to Ksh.72.6 billion, from Ksh.60.8 billion in FY’2021.
Standard Chartered Bank Kenya
Core earnings per share rose by 34.0% to Ksh.31.5, from Ksh.23.5 registered in FY’2021. The performance was driven by the 16.5% growth in total operating income to Ksh.34.0 billion, from Ksh.29.2 billion in FY’2021, against the relatively lower 1.9% growth in total operating expenses to Ksh.16.9 billion from Ksh.16.6 billion in FY’2021.
ABSA Bank
EPS increased by 34.2% to Ksh.2.7 in FY’2022, from Ksh.2.0 in FY’2021, driven by a 24.6% increase in total operating income to Ksh.46.0 billion, from Ksh.36.9 billion recorded in FY’2021. This was weighed down by the 17.6% increase in total operating expenses, to Ksh.25.1 billion, from Ksh.21.4 billion recorded in FY’2021,
NCBA Group
Core earnings per share rose by 34.8% to Ksh.8.4 from Ksh.6.2 in FY’2021, with the variance stemming from the 24.0% increase in total operating income. The overall performance was mainly driven by a 24.0% increase in total operating income to Ksh.60.9 billion, from Ksh.49.2 billion in FY’2021, which outpaced the 13.4% increase in the total operating expenses to Ksh.37.9 billion, from Ksh.33.4 billion in FY’2021.
Co-operative Bank of Kenya
Core EPS rose by 33.2% to Ksh.3.2 from Ksh.2.4 in FY’2021. The performance was driven by a 17.9% increase in total operating income to Ksh.71.3 billion in FY’2022, from Ksh.60.4 billion in FY’2021, which outpaced the 10.9% increase in the total operating expenses to Ksh.42.2 billion in FY’2022, from Ksh.38.1 billion in FY’2021.
Diamond Trust Bank Kenya
Core earnings per share increased by 53.9% to Ksh.24.3 in FY’2022, from Ksh.15.8 in FY’2021. The performance was driven by a 21.4% increase in total operating income to Ksh.31.9 billion in FY’2022, from Ksh.26.3 billion in FY’2021.
The growth was weighed down by the 11.1% increase in the total operating expenses to Ksh.22.1 billion in FY’2022, from Ksh.19.9 billion in FY’2021.
I&M Group
Core earnings per share rose by 34.3% to Ksh.7.0 from Ksh.5.2 in FY’2021 with the variance stemming from the 20.4% increase in total operating income to Ksh.35.7 billion.
The overall performance was mainly driven by a 20.4% increase in total operating income to Ksh.35.7 billion in FY’2022 from Ksh.29.6 billion in FY’2021, which marginally outpaced the 20.2% increase in the total operating expenses to Ksh.21.3 billion in FY’2022, from Ksh.17.7 billion in FY’2021.
Stanbic Holding
Core earnings per share rose by 25.7% to Ksh.22.9, from Ksh.18.2 in FY’2021, with the variance brought on by the lenders’ increased loan loss provision to Ksh.4.9 billion from Ksh.2.5 billion in FY’2021.
Stanbic disclosed that its decision to significantly increase its loan loss provision is mainly due to elevated credit risk as a result of challenging economic environment which might impair loan repayments by its customers.
HF Group Plc
Core earnings per share rose by 138.9% to Ksh.0.7, from a loss of Ksh.1.8 registered in FY’2021, with the variance stemming from the 28.5% growth in total operating income to Ksh.3.0 billion. As such, the core earnings per share performance was driven by the 28.5% growth in total operating income to Ksh.3.0 billion, from Ksh.2.4 billion in FY’2021, coupled with the 14.3% decline in total operating expenses to Ksh.2.8 billion from Ksh.3.3 billion in FY’2021.
Report analysis by Cytonn
