FY 2019 RESULTS

1 CUSTOMERS 22.8 MILLION OUR REGIONAL PRESENCE 342 BRANCHES 1,055 ATMS, Banking Businesses: 23,302 AGENTS & MERCHANTS •KCB Bank •KCB Bank STAFF •KCB Bank 7,584 •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 11 Ethiopia South ATMs 3 Sudan Agents 25 (Representative Office Staff 117 with 1 staff) Touch Points: Branches 15 Uganda ATMs 18 Agents 522 Branches 282 Staff 330 ATMs 454 Kenya Agents 14,332 Branches 14 Staff 6,469 ATMs 25 Rwanda Agents 522 Staff 253 Branches 14 ATMs 15 Branches 6 Tanzania Agents 144 ATMs 7 Staff 287 Burundi Agents 185 Staff 127

3 STABLE CREDIT RATING AGENCY SOVEREIGN KCB BANK KENYA RATINGS

Ratings confirmed in August and B2 (Stable) B2 (Stable) September 2019

B+/B B+/B

4 Acquisition of KCB completed the takeover of National Bank of Kenya 2019 NBK HIGHLIGHTS Sustained interest in the sector with the multiple announcements M&As of mergers and acquisitions.

INTEREST RATE Renewed focus on the sector following the repeal of the rate caps CAP that limited the maximum lending rates to 400bps above CBR. Guidelines on the adoption of customer-centric business models by BANKING banks, risk-based credit pricing, enhanced transparency & information CHARTER disclosure and entrenching an ethical culture within banks. CBK concluded the withdrawal of the older 1,000 shillings banknotes DEMONETIZATION and introduced new notes.

5 AGRIBUSINESS KCB 2JIAJIRI KENYA 2JIAJIRI BENEFICIARIES 17,570 PER SECTOR BUILDING AND PROGRAMME CONSTRUCTION HIGHLIGHTS BEAUTY AND 9,001 PERSONAL CARE AUTOMOTIVE 3,480 ENGINEERING 2,083 11,564 DOMESTIC beneficiaries accessed SERVICES Business Development 1,638 Support. 34,844 ICT BENEFICIARIES TO 315 DATE KShs. 144 million disbursed to beneficiaries to support their business enterprises. Male : Female Ratio Kenya 34,087 ‘Young Africa Works’ Tanzania 54:46 357 KShs 10 billion funding Rwanda from the MasterCard Foundation 300 to scale up the bank’s 2jiajiri job Uganda creation programme 100

6 George Odhiambo, owner, Pentagon View Investments, Shanzu, Mombasa KCB FOUNDATION • George trained in carpentry at Mombasa Technical CASE STUDIES Training School under 2jiajiri programme. • Used KShs 100,000 2jiajiri funding to expand his business and now has access finance and financial institutions, thanks to 2jiajiri BDS support. • Generates an income of KShs 50,000 per month. • Employs two and also offers apprenticeship to youth.

Tom Mogaka, Owner Smart Digital Electricals, Umoja Innercore, • Trained in electrical installation at Eastlands College of Technology under 2jiajiri. • Granted toolkits that have expanded his business. • The go-to fundi in Umoja Estate as well as contractor for DSTV/GOTV installations, basic repairs, TV mounting and aerial installations. • Generates KShs 100,000 monthly income from his business.

7 Mainstreaming our 8 Adopted SDG’s

SUSTAINABILITY •182 Business Bankers, Relationship UPDATE Managers and Credit Analysts trained on Environmental, Social Risk screening and Assessment.

•90.5% of business units have identified key performance indicators for tracking and monitoring of the 8 SDG’s.

UNEP FI – 6 Principles for RESPONSIBLE BANKING: Launched 2019

Impact & Clients & Alignment Target Setting Customers

Transparency Governance Stakeholders & & Culture Accountability

8 2019 GROUP GLOBAL BUSINESS OUTLOOK 2019 GLOBAL FINANCE AWARDS 2019  Best Digital Transformation in Online Banking AWARDS  Best Bank in Kenya  Best CSR Initiative – 2jiajiri

BRAND AFRICA AWARDS 2019 GLOBAL BANKING AND FINANCE AWARDS 2019  Most Admired  Best Corporate Governance Bank in Kenya Brand  Best Customer Service Bank in Kenya

AFRICAN BANKER AWARDS 2019 EUROMONEY AWARDS FOR EXCELLENCE 2019  Best Regional Bank in East Africa  East Africa’s Best Bank for SMEs  Innovation in Banking  Kenya's Best Bank

INTERNATIONAL CUSTOMER EXPERIENCE THE BANKER MAGAZINE – TOP 1000 AWARDS 2019 BANK RANKINGS 2019  Gold Award for the Best Customer Experience Team  717th Globally  Gold Award for Customer Experience Leadership  21st Africa (Highest mover Africa)  Gold Award for the Best Digital Strategy

9 Macro-Economic Highlights

10 MACROECONOMIC HIGHLIGHTS

Kenya 18.3

8.4 9.6 7.1 8.6 8.7 6.6 5.7 5.6 5.1% 4.9 4.7 4.8 5.9 4.3 7.6 6.4 3.2 3.1 7.1 4.0 1.8 1.0

AGRICULTURE MANUFACTURING REAL TRADE EDUCATION TRANSPORT & FINANCIAL & CONSTRUCTION ICT HEALTH MINING& ESTATE STORAGE INSURANCE QUARRYING Q3 19 GDP Growth Rate (%) Contribution to GDP Q3 19 (%) Q3 19 Growth (%)

*Source: Kenya National Bureau of Statistics

11 MACROECONOMIC HIGHLIGHTS GDP Growth 2019 Projected (%)

Regional GDP Growth 8.7 6.8 7.4 6.1 5.8

5.9 3.3

Ethiopia Rwanda Tanzania Uganda Burundi South Sudan

2019 East Africa Projected GDP Growth Rate(%)

Source: AfDB

12 Inflation Evolution (%)

Inflation Target Target Non Food MACROECONOMIC rate Upper Lower Fuel 7.5 HIGHLIGHTS 6.58 6.27 5.82 5.49 5.70 5.56 5.00 4.95 4.70 Kenya 4.14 4.35 3.83 3.51 2.65 2.5

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

Interest Rates Evolution (%) 12.50 12.51 12.47 12.39 12.47 12.38

9.0 9.0 8.5

7.19 7.02 7.08 7.41 7.17 7.17 6.90 6.62 6.65 6.56 6.60 6.65

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

13 USD/KShs Average Monthly Exchange Rate

103.8 103.7 MACROECONOMIC 103.2 103.3 HIGHLIGHTS 102.4 101.6 101.7 101.5 101.1 101.2 Currency 100.2 100.4 Movement JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019

Exchange Rates to USD

3,712 3,660 2,300 2,293 1,881 1,800 922 876 158 130 31 28 2018

2019 Uganda Tanzania Burundi Rwanda South Ethiopia Sudan

14 Current Account Balance (% of GDP) MACROECONOMIC HIGHLIGHTS -4.6 -4.8 -5.0 Kenya -6.2 -6.7

-10.5 Current account deficit at 10 year low 2014 2015 2016 2017 2018 2019

12 Month Private Sector Growth Diaspora emittances 7.3 2019: $ 2,796M 7.0 7.1 6.6 4% 2018: $ 2,697M 6.1 6.3 5.2 4.9 4.3 4.4 Tourism Earnings 3.4 3.0 2019: KShs 163.6B 39% 2018: KShs 157.4B

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

15 Channel Performance

16 December2018

OUR CHANNEL AGENCY, BRANCH MOBILE INTERNET TELLER ATMS CONTRIBUTION 45% AND POS 12% 11% 32%

97% of transactions December2019 performed AGENCY, BRANCH MOBILE INTERNET ATMS outside the TELLER 78% AND POS 4% branch 15% 3%

126% growth 23% decrease in average transactions 23% decrease in Number of branch in non-branch / tellerper day transactions. revenue to over

KShs 12B Dec 2018 71.5 Dec 2018 16.2

Dec 2019 55.2 Dec 2019 12.5

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

17 Value of Transactions: Mobi Service No. of transactions Mobile Revenue (KShs.B) (M) (KShs.M)

OUR CHANNEL 9,873 CONTRIBUTION 281.3 404 3,175 331 290% 62.1 236 Growth in 52.0 2,261 Total Mobile Loans Advanced FY 17 FY18 FY19 FY 17 FY18 FY19 FY17 FY18 FY19

MobileTransaction type(%) FY 2018 FY 2019

212.1B 49.9 48.1 33.7 32.4 54.4B 16.5 16.4 1.6 1.4

2018 2019 B2C B2B C2B LIPA KARO

18 Value of Transactions No. of transactions Agency Revenue (KShs.B) (M) (KShs.M) OUR CHANNEL CONTRIBUTION 820 542 45.3 481 300 AGENCY 34.7 204 22.8 127 47% Growth in FY 17 FY18 FY19 FY 17 FY18 FY19 FY 17 FY18 FY19 Agency Banking Agency Transaction type(%) FY 2018 FY 2019 Value 64.6 37.2 29.9 15.8 15.4 14.4 12.1 7.8 0.8 0.1 0.3 1.6

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

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

19 OUR CHANNEL CONTRIBUTION Value of Transactions No. of transactions ATM revenue (KShs.B) (M) (KShs M) ATM

17% 496 Growth in 486 152 ATM 465 Value 130 15.4 86 15.0 14.0 Deposits of KShs 59.7B collected through 105 intelligent ATMs FY17 FY18 FY19 FY17 FY18 FY19 FY17 FY18 FY19

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

6% 944 Growth in the average 856 value per 801 Merchant/ 49 POS 44 transaction 42

FY 17 FY18 FY19 FY 17 FY18 FY19

21 Financial Performance

22 Government Securities

BALANCE SHEET KShs 120.1B KShs 169.2B HIGHLIGHTS

Net Loans & Advances 25% KShs 535.4B KShs 455.9B Growth in Total Assets (10.1% excl Customer Deposits NBK) KShs 686.6B KShs 537.5B

Total Assets KShs 898.6B KShs 714.3B

2018 2019

23 Sectoral Loans Comparison Industry* KCB Dec 2019 LOAN BOOK 0.4%0.3% Mining and Quarrying PERFORMANCE 3.6% 2.6% Agriculture 4.2% 2.8% Energy and water 3.0% 4.2% Tourism, restaurants and hotels 3.9% 4.4% Financial services 6.8% 4.6% Transport and communication Key growth segments: 19.3% 6.9% Trade • Personal: 68% 4.2% 7.0% Building and construction • Tourism: 57% 13.0% 11.5% Manufacturing • Manufacturing: 25% 14.8% 17.8% Real estate 26.8% 37.8% Personal/Household *CBK Data as at June 2019 * Group gross loans KShs.B 66 36 2 581 19%

477 LCY FCY

81%

Dec-18 Retail Corporate Mortgage Dec-19

24 Asset Quality Review 13.3% 13.0% LOAN BOOK 12.0% 12.0% PERFORMANCE 10.6% 11.9% 9.1% 10.9% 19% 81% 8.5% 6.9% 7.4% - KCB Group 8.0% NPL excl NBK, up 40 bps 1.5% 1.8% 1.0% 0.7% LCY FCY KShs 7.8 billion FY 2016 FY 2017 FY 2018 FY 2019 reduction in the Industry NPL (Kenya) NPL Group CoR Combined NPL NBK gross NPL in NPL Breakdown Q4 2019 14.4% 13.1% 10.4% NBK NPL ratio 8.6% 7.4% down in Q4 2019 6.2% 3.7% to 43% from 50% 2.3% in Q3 2019 CHECK OFF MORTGAGE CORPORATE SME & MICRO 2016 2017 2018 2019

25 Group Coverage Ratio

LOAN BOOK 100 PERFORMANCE 90 81.1% 81.4% 80 72.5%

70 72.1% 68.6% Strong coverage 60 despite increase NPL 50

42.6% 40

30

20

10

0 FY 2017 FY 2018 FY 2019 CBK Coverage Ratio IFRS Coverage Ratio

26 3% 2% 2% BALANCED DEPOSIT MIX 46% 48% 48%

51% 49% 50%

2017 2018 2019 Corporate Retail Others

Currency Mix Deposits by type FY18 Deposits by type FY19 8% 12%

17% 24%

21%

63% 62% 83% 5% 5%

Demand Savings Term Call LCY FCY

27 Core Capital to RWA Total Capital to RWA Group Group STRONG CAPITAL 18.1% 17.2% 19.5% 19.0% BUFFERS 15.4% 16.6%

14.5% 14.5% 14.5% 10.5% 10.5% 10.5%

2017 2018 2019 2017 2018 2019 Kenya Kenya 16.4% 14.9% 15.6% 17.8% 17.5% 16.1%

14.5% 14.5% 14.5% 10.5% 10.5% 10.5%

2017 2018 2019 2017 2018 2019 Min. Core / RWA Core Capital / RWA Min. Total / RWA Total Capital / RWA

28 Net Interest Income KShs 56.1B P&L KShs 48.8B HIGHLIGHTS

Total Non Interest Income Profit KShs 28.2B KShs 23.0B before tax up 9.0% (5% growth Operating Expenses excl NBK) KShs (38.5B) KShs (35.0B) 4.9% Net Earnings growth to Profit before tax Kshs 25.2B KShs 36.9B KShs 33.9B (Flat excl NBK)

2018 2019

29 KShs. M Net Loans & advances PBT (13%) KCB Bank P&L 735 911 664 South Sudan 578 HIGHLIGHTS

25% International KCB Bank 274 220 Businesses Burundi 2,397 3,044

KCB Bank (118%) Uganda 6,520 446 7.4% growth in 6,274 International (81) business PBT 124% KCB Bank Rwanda 14,628 949 12,776 424

KCB Bank 28% Tanzania 17,443 16,465 777 998 2018 2019

30 KCB Group KCB Bank Kenya Actual Actual Y-O-Y Actual Actual Y-O-Y KShs Billion 2018 2019 Change 2018 2019 Change Strong Balance Cash and balances with 42.0 60.8 45% 39.1 42.2 8% Sheet central bank Balances with other 40.1 48.2 20% 16.6 19.7 18% KShs 79.5B growth institutions in net loans Investments in Government 120.1 169.2 41% 103.0 118.4 15% & Other securities Net loans and advances 455.9 535.4 17% 417.2 447.2 7% Fixed assets 14.1 26.6 89% 10.1 15.1 50% Other assets 42.1 58.4 39% 35.7 31.8 (11%) Total Assets 714.3 898.6 26% 621.7 674.3 8%

Customer deposits 537.5 686.6 28% 475.4 528.1 11% Balances due to other banks 20.1 20.4 1% 11.2 8.7 (22%) Other liabilities 20.6 40.4 96% 18.4 26.4 43% Long-term debt 22.4 21.5 (4%) 18.9 18.5 (2%) Total Liabilities 600.6 768.8 28% 523.9 581.7 11% Shareholders’ equity 113.7 129.7 14% 97.8 92.6 (5%) Total liabilities and equity 714.3 898.6 26% 621.7 674.3 8%

31 KCB Group KCB Bank Kenya

Actual Actual Y-O-Y Actual Actual Y-O-Y 5% GROWTH IN KShs Billion EARNINGS 2018 2019 Change 2018 2019 Change

Interest income 66.3 74.4 12% 59.3 63.7 8% Interest expense (17.5) (18.2) 4% (15.0) (14.9) (1%) Net interest income 48.8 56.1 15% 44.3 48.9 10% Foreign exchange income 4.4 4.5 2% 2.7 3.1 16% Net fees and commissions 14.2 19.8 40% 11.9 16.8 41% Other income 4.4 3.8 (13%) 3.9 3.6 (8%) Total other operating income 23.0 28.2 22% 18.6 23.5 27% Total other operating expenses (35.0) (38.5) 10% (28.3) (30.5) 8% Provisions for bad debts (2.9) (8.9) 207% (3.1) (8.7) 181% Profit before tax 33.9 36.9 9% 31.4 33.2 6% Tax (9.9) (11.7) 19% (9.0) (10.5) 16% Profit after tax 24.0 25.2 5% 22.4 22.7 1%

32 OVERVIEW OF KEY FINANCIAL RATIOS

FY 18 HY 19 Q319 KENYA GROUP 21.9% 23.5% 21.8% Return on Average Equity 24.9% 20.7%

48.3% 45.7% 44.7% Cost to Income 42.1% 45.9%

6.9% 7.8% 8.3% Gross NPL to Gross Loans 7.3% 10.9%

72.4% 60.8% 56.0% NPL Coverage 90.8% 72.1%

19.7% 19.1% 18.3% Debt to Equity 19.9% 16.6%

32.0% 34.1% 35.2% Non funded income to total income 32.5% 33.4%

3.2% 2.8% 2.8% Cost of funds 2.8% 2.8%

8.1% 8.3% 7.9% Net Interest Margin 8.1% 8.1%

0.7% 1.3% 1.7% Cost of risk 1.9% 1.8%

84.8% 89.2% 87.0% Loan to Deposit Ratio 89.9% 84.6%

8.0% 14.0% 11.7% Growth of Net Loans and Advances 7.2% 17.4%

8.0% 7.0% 11.4% Growth of Customer Deposits 11.1% 27.7%

33 2019 DIVIDEND  KCB Group paid an interim dividend of KShs 1.00 per share in November 2019.

 The Directors recommend a final dividend for the year ended 31 December, 2019 of KShs 2.50

34 Non funded income growth 25.0% NFI Ratio 36.2% Cost/ Income ratio 45.0% FY 2020 OUTLOOK Cost of funds 2.8% Cost of Risk 1.8% NPL Ratio 8.0% NIM 7.8% Asset yield 11.1% Loan growth 14.0% Deposit growth 14.0% ROA 3.5% ROE 22.9%

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

36