HY 2020 RESULTS

1 CUSTOMERS 24.6 MILLION OUR REGIONAL PRESENCE 359 BRANCHES 1,082 ATMS, Banking Businesses: 23,192 AGENTS & MERCHANTS •KCB Bank •KCB Bank STAFF •KCB Bank 7,814 •KCB Bank •KCB Bank •KCB Bank KCB BANK KENYA ( • KCB BANK REPRESENTATIVE •Ethiopia Rep. Office SOUTH SUDAN OFFICE )

KCB BANK KENYA Other Investments: KCB BANK NATIONAL BANK OF KENYA UGANDA • KCB Capital Limited KCB INSURANCE AGENCY KCB FOUNDATION • KCB Insurance Agency KCB CAPITAL KCB BANK • KCB Foundation RWANDA • Kencom House Limited

KCB BANK KCB BANK BURUNDI TANZANIA

2 OUR FOOTPRINT Branches 12 Ethiopia South ATMs 3 Sudan Agents 42 (Representative Office Staff 118 with 1 staff) Touch Points: Branches 15 Uganda ATMs 18 Agents 530 Branches 300 Staff 271 ATMs 357 Kenya Agents 13,412 Branches 12 Staff 6,774 ATMs 25 Rwanda Agents 415 Staff 249 Branches 14 ATMs 15 Branches 6 Tanzania Agents 172 ATMs 7 Staff 274 Burundi Agents 185 Staff 127

3 CREDIT RATINGS RATING AGENCY SOVEREIGN KCB BANK KENYA Credit Ratings at par with the Sovereign Rating B2 (Negative) B2 (Negative)

B+/B B+/B (Negative) (Negative)

4 KCB 2JIAJIRI 2JIAJIRI BENEFICIARIES AGRIBUSINESS PROGRAMME 19,080 PER SECTOR BUILDING AND HIGHLIGHTS CONSTRUCTION BEAUTY AND 9,910 PERSONAL CARE AUTOMOTIVE 3,480 ENGINEERING 2,083 FUTURE OF 2JIAJIRI

DOMESTIC Catalyze job and wealth SERVICES creation for at least 1,638 36,706 2,000,000 ICT youth engaged in the informal BENEFICIARIES TO 515 DATE sector within Eastern Africa 5-year investment of over KShs 50 billion Male : Female Ratio to nurture and grow youthful and Kenya 35,949 SME entrepreneurs Tanzania ‘Young Africa Works’ 54:46 357 Rwanda KShs 10 billion funding 300 from the MasterCard Foundation Uganda to scale up the Bank’s 2jiajiri job 100 creation programme

5 KCB FOUNDATION Peter Kanyi, Owner, D-DEKX Autocare, CASE STUDIES • Studied mechanical and electrical engineering at Eastlands College of Technology under 2jiajiri. • Opened a business, D-DEKX Autocare, where he makes an average of KShs. 50,000 monthly. • Has leveraged on innovation and creativity to combine car repairs and car wash services to maximise profits. • Has employed one youth in the business.

Serah Njeri, Mason, Young Africa Works, Ngong • Studied masonry at the Kabete National Polytechnic under 2jiajiri. • Transitioned to the Young Africa Works project- partnership between 2jiajiri and Mastercard Foundation. • Is applying her skills at Arc Skills- the firm constructing Young Africa Works project greenhouses at Kibiko, Ngong, from where she earns a living.

6 SUSTAINABILITY FOCUS • KCB Bank Kenya has restructured facilities worth over KShs. 100 B to cushion customers against the Ongoing effects of the COVID-19 alignment pandemic. with the • KCB Group adopted 9 Principles of SDGs. Implementation, Responsible impact measurement and tracking ongoing. Banking • Environmental and Social Due Diligence screening completed on KShs. 31.6B of the portfolio

7 Macro-Economic Highlights

8 MACROECONOMIC HIGHLIGHTS

Kenya 42.4 9.8 9.5

6.7 6.4 6.2 5.4% 6.1 5.8 5.3 4.9 4.3 4.3 2.9 6.1 1.1 6.3 6.4 3.9 4.8 6.9 1.3 0.8

AGRICULTURE MANUFACTURING REAL TRADE EDUCATION TRANSPORT & FINANCIAL & CONSTRUCTION ICT HEALTH MINING& 2019 ESTATE STORAGE INSURANCE QUARRYING Growth -0.3%

2020 Contribution to GDP Q1 2020 (%) Q1 2020 Growth (%) Projection

Sources: -Kenya National Bureau of Statistics -IMF

9 MACROECONOMIC HIGHLIGHTS GDP Growth (%) Sub-Saharan Africa GDP Growth (%)

10.1 11.3 9.0 6.3 4.9 4.9 3.1 3.2 2.0 1.8 1.9 1.8 2020 Projection 2019 Ethiopia Rwanda Tanzania Uganda Burundi South Sudan -3.2

-5.5

2019 2020 Growth Projection Source: IMF

10 Inflation Evolution (%)

Inflation Target Target Non Food MACROECONOMIC rate Upper Lower Fuel 7.5 HIGHLIGHTS 6.37 6.27 6.06 5.82 5.78 5.70 5.56 5.62 5.47 5.00 4.95 4.59 Kenya 3.83

3.4 2.5 1.6

JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN 2019 2019 2019 2019 2019 2019 2019 2020 2020 2020 2020 2020 2020

Interest Rates Evolution (%)

12.47 12.46 12.47 12.43 12.39 12.38 12.24 12.29 12.19 12.19 11.76 11.87 11.76

9.0 8.5 8.25 7.25 7.00 7.00 7.17 7.29 7.31 7.28 7.22 7.29 7.09 6.90 6.62 6.65 6.56 6.60 6.65

JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN 2019 2019 2019 2019 2019 2019 2019 2020 2020 2020 2020 2020 2020 Sources: of Kenya Kenya National Bureau of Statistics 91 day bill Average Lending Rate CBR

11 USD/KShs. Average Monthly Exchange Rate

106.4 106.4

MACROECONOMIC 103.3 103.7 101.7 101.5 HIGHLIGHTS 101.1 100.8

Depreciation of regional currencies against the USD as a JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN result of Covid-19 2019 2019 2019 2019 2019 2019 2019 2020 2020 2020 2020 2020 2020 pandemic’s will lead to imported inflation. Exchange Rates, Local Currency to USD

3,730 3,690 2,295 2,278 1,913 1,845 937 899 235 164 34 29 Jun 2019

Jun 2020 Uganda Tanzania Burundi Rwanda South Ethiopia Sudan

12 Current Account Balance (% of GDP) MACROECONOMIC HIGHLIGHTS

-5.2 -5.1 Kenya -5.8 -5.8 -5.8 -6.9 -7.2 Diaspora emittances Q2 2020: $ 754.9M 2015 2016 2017 2018 2019 12 moths to 2020 4% Q2 2019: $ 783.9M May 2020 Projected

12 Month Private Sector Growth 8.9% 9.0% 8.1% 7.7% 7.6% 7.3% 7.1% 7.3% 7.0% 6.6% 6.1% 6.3% 5.2%

JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN 2019 2019 2019 2019 2019 2019 2019 2020 2020 2020 2020 2020 2020

13 Channel Performance

14 HY 2019

OUR CHANNEL AGENCY, BRANCH INTERNET ATMS CONTRIBUTION MOBILE TELLER AND POS 4% 78% 14% 4% 98% of transactions HY 2020

performed AGENCY, BRANCH outside the MOBILE INTERNET ATMS 79% AND POS TELLER 3% branch 16% 2%

13% 20% decrease in average transactions 46% decrease in Number of branch growth in / tellerper day transactions. non-branch

revenue to HY 2019 64.4 HY 2019 7.3

KShs. 4.9B HY 2020 51.6 HY 2020 3.9

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

15 OUR CHANNEL CONTRIBUTION Value of Mobile Transactions: No. of Mobile Transactions Mobile Revenue (KShs.B) (M) (KShs.M) 12% 4,398 Reduction in 4,150 130.4 Total Mobile 127.3 Loans Advanced 392 293 175 26.9 1,304 103.1B 90.6B HY 18 HY 19 HY 20 HY 18 HY 19 HY 20 HY 18 HY 19 HY 20

HY 19 HY 20

16 MobiTransaction type(%) HY 2019 HY 2020 OUR CHANNEL CONTRIBUTION 47.1 38.3 34.6 32.7 28.0 16.2 KShs. 98.6B 2.1 1.1 worth of C2B deposits in HY20 B2C B2B C2B LIPA KARO Month on Month Evolution of C2B Transactions Exponential Growth in 1.40 40 Number and Value of 1.27 1.20 1.06 35 C2B Transactions 30 1.00 during Covid-19 Period 0.75 25 0.80 driven by the push to 0.57 20 0.60 0.51 0.50 35 digital transactions and 28 15 0.40 10 fee waivers. 17 0.20 5 6 5 8 - 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Value (KShs B) Number (M)

17 Value of Transactions No. of transactions Agency Revenue (KShs.B) (M) (KShs.M) OUR CHANNEL CONTRIBUTION 413 21.7 21.7 183 AGENCY 270 135 16.3 239 101 35% Growth in HY 18 HY 19 HY 20 HY 18 HY 19 HY 20 HY 18 HY 19 HY 20 Agency Banking Volumes Agency Transaction type(%) HY 2019 HY 2020 38.7 37.1 29.9 29.3 16.1 16.5 14.6 14.4

1.6 1.4 0.1 0.1

CASH CASH SCHOOL BALANCE BILL OTHERS* DEPOSIT WITHDRAWAL FEES ENQUIRY PAYMENT

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

18 OUR CHANNEL CONTRIBUTION Value of Transactions No. of Transactions ATM Revenue (KShs.B) (M) (KShs M) ATM

20% 241 Reduction in 234 number of 65 7.7 195 ATM 61 61 transactions 6.8 5.5

HY 18 HY 19 HY 20 HY 18 HY 19 HY 20 HY 18 HY 19 HY 20

19 OUR CHANNEL CONTRIBUTION Value of Transactions (KShs.B) POS Revenue (KShs. M) MERCHANT / POS

2% 439 Decrease in 24 389 number of POS 21 transactions to 18 306 3.2M

HY 18 HY 19 HY 20 HY 18 HY 19 HY 20

20 Financial Performance

21 Government Securities KShs 208.5B BALANCE SHEET KShs 135.0B HIGHLIGHTS

Net Loans & Advances KShs 559.9B KShs 478.7B 28% Customer Deposits Total assets growth split KShs 563.2B KShs 758.2B between 12% organic and 16% inorganic. Total Assets KShs 953.1B KShs 746.5B

HY 19 HY 20

22 Distribution of The main Capitalization of arrears features of the Restructured restructures: Principal and interest moratorium ranging from 3 – 12 months loans Revision of the tenor

25.0 Unchanged Interest rate for the majority of facilities 20% 4,002 20.0 22.7

7% KShs 15.0 16.1 101B 14.7 15.0 10.0 12.3 73% 8.2 5.0 6.7 778 126 257 433 364 181 225 640 Corporate Retail Mortgage 1.6 3.8 - Others MANUFACTURING TRANSPORT & BUILDING & PERSONAL TOURISM,RESTAURANT TRADE REAL ESTATE COMMUNICATION CONSTRUCTION & HOTELS Value KShs B Count

23 Sectoral Loans Comparison KCB HY19 KCB HY20 LOAN BOOK 0.2% 0.3% Mining and Quarrying PERFORMANCE 5.1% 1.8% Financial services 2.8% 2.5% Energy and water 2.7% 2.7% Agriculture Stable loan book 4.3% 4.4% Tourism, restaurants and hotels distribution over 4.5% 4.4% Transport and communication the period 6.5% 6.9% Building and construction 7.0% 8.0% Trade 12.0% 12.5% Manufacturing 18.0% 18.8% Real estate 37.1% 37.7% Personal/Household Growth driven by Group gross loans (KShs. B) the Corporate 62 2 612 banking business 502 46

19% LCY FCY

81%

Jun-19 Retail Corporate Mortgage Jun-20

24 Asset Quality Review

LOAN BOOK 12.7% 13.1% PERFORMANCE 12.0% 9.9%

8.4% Increase in the 8.0% 7.8% 4.0% provision expense 1.0% 1.3% LCY FCY for potential loan 0.4% losses arising from HY17 HY18 HY19 HY20 the pandemic Industry NPL (Kenya) NPL Group CoR NPL Coverage % 100.0 90.0 NPL Breakdown 75.0 80.0 65.6 70.0 72.6 64.0 60.0 60.9 61.7 14.1% 14.9% 50.0 12.0% 40.0 10.6% 10.3% 9.5% 30.0

20.0 3.9% 2.9% 10.0

- CHECK OFF MORTGAGE CORPORATE SME & MICRO HY18 HY19 HY20

HY19 FY19 1Q20 HY20 CBK Coverage Ratio IFRS Coverage Ratio

25 2% 2% 1% BALANCED 46% 49% 47% DEPOSIT MIX

Low cost and stable 52% 49% 52% funding mix driven by growth in demand deposits HY18 HY19 HY20 Corporate Retail Others

Currency Mix Deposits by type HY19 Deposits by type HY20 8% 7%

17% 19% 23%

5% 64% 5% 83% 69%

LCY FCY Demand Savings Term Call

26 Core Capital to RWA Total Capital to RWA Group Group STRONG CAPITAL 18.1% 18.0% 17.9% 19.5% 19.4% 19.5% BUFFERS

14.5% 14.5% 14.5% Ample headroom on 10.5% 10.5% 10.5% the key capital ratios

HY18 HY19 HY20 HY18 HY19 HY20

Kenya Kenya 17.8% 16.4% 16.1% 16.1% 17.5% 17.4%

14.5% 14.5% 14.5%

10.5% 10.5% 10.5%

HY18 HY19 HY20 HY18 HY19 HY20 Min. Core / RWA Core Capital / RWA Min. Total / RWA Total Capital / RWA

27 Net Interest Income KShs 31.1B P&L KShs 25.4B HIGHLIGHTS

Total Non Interest Income Profit KShs 13.9B KShs 13.2B before tax down 28% Operating Expenses

KShs (17.6B) KShs (21.2B) 40% reduction Net Earnings Profit before tax growth to KShs 12.8B KShs 17.9B Kshs 7.6B

HY 19 HY 20

28 500 Chart Title 452 P&L 418

HIGHLIGHTS 400

305 302 299 Other banking 300 businesses 229 performance 216 200 188 187 156 Aggregate PBT up 115 22% to KShs 1.5B 100

0

-100

-143 -200 KCB South Sudan KCB Tanzania KCB Rwanda KCB Uganda KCB Burundi NBK

H1 19 H1 20

29 KCB Group KCB Bank Kenya Actual Actual Y-O-Y Actual Actual Y-O-Y KShs Billion HY19 HY20 Change HY19 HY20 Change Strong Balance Cash and balances with central Sheet 47.4 60.8 28% 42.8 45.2 5% bank Balances with other institutions 35.7 53.3 50% 14.4 25.0 74% KShs 81 B growth Investments in Government & 135.0 208.5 54% 120.0 149.7 25% in Net Loans and Other securities Advances Net loans and advances 478.7 559.9 17% 435.7 464.0 6% Fixed assets 16.2 27.7 71% 11.5 15.3 33% Other assets 33.6 42.9 28% 28.6 31.1 9% Total Assets 746.5 953.1 28% 653.1 730.3 12%

Customer deposits 563.2 758.2 35% 502.8 587.0 17% Balances due to other banks 18.8 13.4 (29%) 8.7 7.8 (10%) Other liabilities 24.5 23.0 (6%) 21.9 15.7 (28%) Long-term debt 22.4 21.4 (5%) 19.0 18.7 (2%) Total Liabilities 629.0 816.0 30% 552.4 629.2 14% Shareholders’ equity 117.5 132.1 12% 100.7 101.1 0% Total liabilities and equity 746.5 948.2 27% 653.1 730.3 12%

30 KCB Group KCB Bank Kenya

Actual Actual Y-O-Y Actual Actual Y-O-Y (40%) GROWTH KShs Billion IN EARNINGS HY19 HY20 Change HY19 HY20 Change

Interest income 33.6 41.4 23% 29.9 32.7 9% Decline in earnings Interest expense 8.2 10.3 26% 6.9 7.7 11% driven by the Net interest income 25.4 31.1 22% 23.0 25.0 9% increased Foreign exchange income 2.1 2.4 18% 1.3 1.5 17% provisions in the wake of increased Net fees and commissions 8.9 9.4 6% 7.8 7.8 0% credit risks due to Other income 2.2 2.1 (3%) 1.9 1.6 (14%) COVID-19 Total other operating income 38.6 45.0 17% 34.0 36.0 6% Total other operating expenses 17.6 21.2 20% 14.5 14.3 (2%) Provisions for bad debts 3.0 11.0 264% 2.7 10.3 283% Profit before tax 17.9 12.8 (28%) 16.8 11.4 (32%) Tax (5.2) (5.2) 1% (5.0) (4.3) (13%) Profit after tax 12.7 7.6 (40%) 11.8 7.0 (40%)

31 OVERVIEW OF KEY FINANCIAL RATIOS HY 20 FY 18 HY 19 FY 19 KENYA GROUP 21.9% 23.5% 20.7% Return on Average Equity 14.2% 11.6%

48.3% 45.7% 45.9% Cost to Income 39.7% 47.0%

6.9% 7.8% 10.9% Gross NPL to Gross Loans 10.1% 13.7%

72.4% 60.8% 72.1% NPL Coverage 85.1% 61.7%

19.7% 19.1% 16.6% Debt to Equity 18.5% 16.2%

32.0% 34.1% 33.4% Non funded income to total income 30.5% 31.0%

3.2% 2.8% 2.8% Cost of funds 2.6% 2.7% 8.1% 8.3% 8.1% Net Interest Margin 7.6% 7.8%

0.7% 1.3% 1.8% Cost of risk 4.3% 4.0%

84.8% 89.2% 84.6% Loan to Deposit Ratio 85.4% 80.7%

8.0% 14.0% 17.4% Growth of Net Loans and Advances 6.5% 17.0%

8.0% 7.0% 27.7% Growth of Customer Deposits 16.8% 34.6%

32 Investor Relations [email protected] www.kcbgroup.com

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