Q1 2019

RESULTS

OUR REGIONAL PRESENCE

KShs. 119BTOTAL EQUITY

258

BRANCHES946 ATMS,

16,642 AGENTS &

MERCHANTS

2

Branches 200

ATMs 369

Staff 5,058

Agents 8,604

Branches 10

ATMs 2

Staff 138

Agents 0

Staff 322

Agents 227

Branches 5

ATMs 7

Staff 122

Agents 172

Branches 14

ATMs 25

Staff 288

Agents 270Branches 14

ATMs 17

Staff 292

Agents 49

Kenya

SouthSudan

Branches 15

Uganda ATMs 17

Burundi

Rwanda

Tanzania

Ethiopia

(Representative Office)

Profit

Before Tax

(KShs. M)

1Q19

8,496

1Q18

7,484

1Q18

159,43222.6%

1Q18

19.5%

1Q18

418,618

1Q18

43,775

1Q18

49.1%

1Q18

496,366

Non

Performing

Loans

(KShs. M)

1Q19

38,824Cost to

Income

Ratio

1Q19

48.5%

Customer

Deposits

(KShs. M)

1Q19

552,204

Return

on Average

Equity

1Q19

21.9%

Net Loans

and Advances

(KShs. M)

1Q19

464,263

Total debt /

Total equity

1Q19

18.0%

1Q18

1Q19

135,057Market

Capitalization

(KShs. M)

Q1 2019

FINANCIAL

HIGHLIGHTS

Staff costs

(KShs. M)

1Q19

4,612

1Q18

4,452

3

Economic drivers:• Big Four – Housing Healthcare Manufacturing Food security

• Resilient Kenya Shilling supported by record growth in diaspora

remittances, tourism & horticulture

Banking Industry:

• Momentum for mergers & acquisitions

• Increased regulatory oversight on compliance with Kenya’s Anti-Money

Laundering and Combating the Financing of Terrorism (AML/CFT)

• Kenya Banking Sector Charter to come in force in June

National Bank of Kenya (NBK) offer• Offer to acquire 100% of NBK

• Documentation relating to the acquisition availed to

shareholders as per regulatory standardsHIGHLIGHTS

Overview of the year to date

2019 KENYA

4

MACRO-ECONOMIC HIGHLIGHTS

MACRO-ECONOMIC HIGHLIGHTS

Kenya

2018

GDP Growth Rate(%)

Contribution to GDP

2018(%) 2018Growth (%)

6.3%

21.30

6.40

9.648.36 7.58

AGRICULTURE MANUFACTURING REAL TRADE EDUCATION TRANSPORT&

FINANCIAL& CONSTRUCTION ICT HEALTH MINING&

ESTATE STORAGE INSURANCE QUARRYING

6.877.12

6.09

1.731.03

5.60

4.20

4.10

6.305.90

8.80

5.60 6.60

11.40

4.50

2.80

6

4.25

GDP Growth (%)

Tanzania UgandaRwanda BurundiEthiopia

-6.3

8.0

2.8

7.2

6.1

6.7

2018P*

East Africa

GDP Growth Rate (%)

5.7%South

Sudan

*Source: AfDB, Africa Economic Outlook 2019

MACRO-ECONOMIC HIGHLIGHTS

Regional GDP

Growth

7

Inflation

rate

Target

Upper

Target

Lower

Non Food

Fuel

91-daybill Avg.lendingrates CBRrate

8.02

10.00

13.65 13.49 13.2212.78 12.61

8.00 7.97 7.73 7.67 7.64 7.56 7.36 7.19 7.02 7.08

MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019

Interest Rate Evolution (%)

7.50

4.83

2.50

3.00

4.35

3.50

MACRO-ECONOMIC HIGHLIGHTS

Kenya

Inflation Evolution (%)

8

9.50

MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR

2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019

7.63 7.34

9.00

12.47

USD/KES Exchange Rate(%)

101.3

100.6

101.0

100.6 100.8

102.6100.2

100.4100.7

Exchange Rates to USD

TanzaniaUganda RwandaBurundi Ethiopia

130

28

1,826

902

3,707

2,344

South

Sudan

MACRO-ECONOMIC HIGHLIGHTS

Currency

Movement

9

MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR

2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019

Current Account Balance (% ofGDP)

2014

-10.4

-6.7-5.2 -6.2

-5.1

2015 2016 2017 2018

MACRO-ECONOMIC HIGHLIGHTS

Kenya

3.8%

2.8%

2.0%

4.3% 4.3%

3.9%

4.4%

3.0%

3.4%

12 Month Private Sector CreditGrowth

10

MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019

3.0%

2.4%

-4.7

Q1 2019

CHANNEL

PERFORMANCE

March2018

March2019

12% decrease in average transactions

/ tellerper day12% decrease in Number of branch

transactions.

OUR

CHANNEL

CONTRIBUTION

BRANCH

TELLER

9%

AGENCY,

INTERNET

AND POS

27%

MOBILE

56%ATMS

8%

Avg. Transactions / Teller perday Number of Branch Transactions(M)

Mar 2018

Mar 2019

80.0

70.3

4.5

4.0

91% of

transactions

performed

outside the

branch

Mar 2018

Mar 2019

137% growth in

non-branch

revenue to

over 3.2B

MOBILE

42%

AGENCY,

INTERNET

AND POS

32%

BRANCH

TELLER

14%

ATMS

12%

12

90

55.1

1Q 17 1Q18 1Q19

No. of transactions

(M)

Valueof Transactions

(KShs.B)

7526.0

9.6

13.4

32.532.548.148.1

17.317.3

2.12.1

B2C B2B C2B LIPA

KARO

MobileTransaction type(%)

OUR

CHANNEL

CONTRIBUTION

270%Growth in

Mobile

Loans

Advanced

1Q 20191Q 2018

1Q 18

9.2B

1Q 19

33.8B

13

1,692

Mobile Revenue

(KShs.M)

646

1Q 17 1Q18 1Q19 1Q18 1Q19

66

25

Agent revenue

(KShs M)

No. of transactions

(M)Value of Transactions

(KShs.B)

4910.8

4.6

7.864

75

104

14.715.0

60.4

37.8

16.4

14.98.1

29.2

0.90.1 0.7

1.7

CASH

DEPOSIT

CASH

WITHDRAWAL

SCHOOL

FEES

BALANCE

ENQUIRY

BILL

PAYMENT

OTHERS

Agency Transaction type(%)

OUR

CHANNEL

CONTRIBUTION

35% Growth in

Agency

Banking

Volumes

*Others: Account opening, mini statement, load cards and Funds transfer14

1Q 17 1Q18 1Q19 1Q 17 1Q18 1Q19 1Q 17 1Q18 1Q19

1Q 20191Q 2018

12

No. of transactions

(M)

Value of Transactions

(KShs.B)

OUR

CHANNEL

CONTRIBUTION

86

130

3.7

3.4

3.7

2% Growth in

ATM

Volumes

15

ATM revenue

(KShs M)

95

126 120

1Q 17 1Q 18 1Q 19 1Q 17 1Q 18 1Q 19 1Q 17 1Q 18 1Q 19

1011.2

POS Revenue (KShs. M)Value of Transactions (KShs.B)

12

OUR

CHANNEL

CONTRIBUTION

202

232

22117% reduction in

the average

value of

Merchant/

POS

transactions

16

1Q 17 1Q 18 1Q 191Q 17 1Q 18 1Q 19

OUR FINANCIAL

PERFORMANCE

TO DATE

BALANCE

SHEET

HIGHLIGHTS

Govt. Securities

Customer

Deposits

Net Loans &

Advances

Total Assets

KShs 647.5B

12% Total

Assets

growth

KShs 464.3B

KShs 133.3BKShs 112.1B

KShs 418.6B

KShs 496.4B KShs 552.2B

KShs 725.6B

18 1Q18 1Q19

LOAN

BOOK

PERFORMANCE

11%Growth in

Net Loans

and

Advances

Sectoral Loans Comparison

462

503 20

18 3

Mar-18 Retail Corporate Mortgage Mar-19

* Group gross loans KShs.B

81%

19%

LCY

FCY

19

26.0%

15.5%

13.0%

4.8%

18.9%

3.6%

6.8%

2.6%

4.7%

3.7%

0.4%

36.0%19.0%

12.0%

6.0%

7.0%

5.0%

5.0%

4.0%

3.0%

3.0%

0.0%

Personal/Household

Real estate

Manufacturing

Building and construction

Trade

Financial Services

Transport and communication

Tourism, restaurants and hotels

Energy and water

Agriculture

Mining and Quarrying

Industry Sept 2018 KCB Mar 19

LOAN

BOOK

PERFORMANCE

7.7%Asset quality

improvement

Asset Quality Review

NPL Breakdown

7.8%

9.5%

11.8%12.8%

1.6%1.0% 0.6% 1.0%

8.5%

7.9%

9.8% 7.7%

Q1 2016 Q1 2017 Q1 2018 Q1 2019

Industry NPL (Kenya)

89%

11%

LCY FCY

3.2%

7.4%

14.8%16.3%

3.4%

9.5% 10.5%

15.6%

CHECK OFF MORTGAGE CORPORATE SME & MICRO

Q1 2018 Q2 2018 FY 2018 Q1 201920

LOAN

BOOK

PERFORMANCE

11%Decrease in

stock of Non-

Performing

Loans

32,151

43,775

38,824

79.6%

62.9% 63.9%

43.3%

61.0%60.8%

30.0%

60.0%

90.0%

120.0%

-

10,000

20,000

30,000

40,000

50,000

1Q17 1Q18 1Q19

Gross NPL Central Bank Coverage Ratio IFRS Coverage Ratio

Improved IFRS Coverage

21

BALANCED

FUNDING

STRUCTURE

50% 50% 51%

48% 48% 48%

2% 2% 1%

1Q17 1Q18 1Q19

Corporate Retail Other

Currency Mix Customer deposits mix 1Q18 Customer deposits mix 1Q19

88%

12%

LCY FCY

64%6%

24%

6%

Demand Savings Term Call

62%6%

24%

8%

22

Customer deposits segmentation

STRONG

CAPITAL

BUFFERS

Core Capital to RWA Total Capital to RWA

Kenya Kenya

Group Group

10.5% 10.5% 10.5%

14.1%15.1%

18.6%

1Q17 1Q18 1Q19

14.5% 14.5% 14.5%

17.0%15.3%

20.0%

1Q17 1Q18 1Q19

10.5% 10.5% 10.5%

14.1%15.0% 16.4%

1Q17 1Q18 1Q19

14.5% 14.5% 14.5%

18.7%15.0%

17.7%

1Q17 1Q18 1Q1923

P&L

HIGHLIGHTS

11%

earnings

growth to

KShs

5.8B

Net interest

income

Profit before tax

Operating Expenses

(excl. Provisions)

Total non

Interest Income

KShs 8.5B

KShs (9.1B)

KShs 6.0B

KShs 12.7BKShs 11.4B

KShs 5.5B

KShs (8.9B)

Profit

before

tax

Up 14%

KShs 7.5B

24 1Q18 1Q19

International

Businesses

highlights

13%

growth in

Net Loans

and

Advances

1Q18 1Q19

352

703

1,305

2,672

6,498

6,192

12,986

13,491

13,603 16,373

KShs. M Net Loans & Advances PBT

KCB Bank South Sudan

KCB Bank Burundi

KCB Bank Uganda

KCB Bank Rwanda

KCB Bank Tanzania

(425)

115 (127%)

51 73

49

(138)

142 103

162 224

43%

(382%)

(27%)

38%

25

Strong balance

sheet driven by

KShs 46B growth

in net loans

KShs Billion

KCB Group KCB Bank Kenya

Actual 1Q18

Actual1Q19

Y-O-Y Change

Actual 1Q18

Actual1Q19

Y-O-Y Change

Cash and balances with central bank

33.8 56.3 67% 30.4 35.0 15%

Balances with other institutions 37.1 19.4 (48%) 10.0 11.1 11%

Investments in Government & Other securities

112.1 133.3 19% 96.6 118.0 22%

Net loans and advances 418.6 464.3 11% 383.9 424.8 11%

Fixed assets 14.4 13.9 (3%) 10.1 10.0 (1%)

Other assets 31.4 38.5 23% 29.9 35.6 19%

Total Assets 647.5 725.7 12% 560.9 634.5 13%

Customer deposits 496.4 555.2 11% 438.7 491.0 12%

Balances due to other banks 9.5 9.5 (0%) 4.7 0.9 (81%)

Other liabilities 19.4 23.0 18% 22.0 21.3 (3%)

Long-term debt 22.5 21.5 (5%) 18.4 18.7 2%

Total Liabilities 547.8 606.2 11% 483.9 531.9 10%

Shareholders’ equity 99.6 119.5 20% 77.0 102.6 33%

Total liabilities and equity 647.5 725.7 12% 560.9 634.5 13%

26

KShs Billion

KCB Group KCB Bank Kenya

Actual 1Q18

Actual1Q19

Y-O-Y Change

Actual 1Q18

Actual1Q19

Y-O-Y Change

Interest income 15.7 16.8 7% 14.0 15.0 7%

Interest expense (4.2) (4.1) (4%) (3.5) (3.4) (3%)

Net interest income 11.4 12.7 11% 10.5 11.6 10%

Foreign exchange income 1.0 1.0 0% 0.7 0.6 (6%)

Net fees and commissions 3.6 4.0 12% 2.7 3.5 29%

Other income 0.9 1.0 16% 0.8 0.9 13%

Total other operating income

5.5 6.0 9% 4.2 5.0 20%

Total other operating expenses

(8.8) (9.1) 2% (6.7) (7.4) 10%

Provisions for bad debts (0.6) (1.2) 94% (0.5) (1.0) 100%

Profit before tax 7.5 8.5 14% 7.4 8.2 10%

Tax (2.3) (2.7) 18% (2.0) (2.6) 25%

Profit after tax 5.2 5.8 11% 5.4 5.6 4%

11% GROWTH

IN EARNINGS

27

OVERVIEW OF KEY FINANCIAL RATIOS

Return on Average Equity

Cost to Income

Gross NPL to Gross Loans

NPL Coverage

Debt to Equity

Non funded income to total income

Cost of funds

Net Interest Margin

Cost of risk

Loan to Deposit Ratio

Growth of Net Loans and Advances

Growth of Customer Deposits

19.5% 21.9%

49.1% 48.3%

9.8% 6.9%

61.0% 72.4%

22.6% 19.7%

32.7% 32.0%

3.2% 3.2%

8.6% 8.1%

0.6% 0.7%

84.3% 84.8%

4% 8%

9% 8%

21.9%

48.5%

7.7%

60.8%

18.0%

32.2%

2.8%

8.5%

1.0%

84.1%

11%

11%

FY17 Q1 18 FY 18 KENYA GROUP

19.5%

51.0%

8.5%

72.5%

14.0%

32.2%

3.0%

8.9%

1.5%

85.1%

10%

11%

22.7%

44.8%

8.1%

64.9%

18.3%

30.2%

2.8%

8.1%

0.9%

86.5%

10.7%

11.9%

28

2019

OUTLOOK

Non funded income growth 25.0%

NFI Ratio 34.0%

Cost/ Income ratio 47.0%

Operating expenses 6.0%

Cost of funds 3.0%

Cost of Risk 1.2%

NPL Ratio 7.0%

NIM 8.3%

Asset yield 11.3%

Loan growth 9.0%

Deposit growth 9.0%

ROA 3.60%

ROE 23.0%