Q1 2020 RESULTS

1 CUSTOMERS 28.0 MILLION OUR REGIONAL PRESENCE 344 BRANCHES 1,058 ATMS, Banking Businesses: 21,681 AGENTS & MERCHANTS •KCB Bank •KCB Bank STAFF •KCB Bank 7,561 •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 286 Staff 330 ATMs 456 Kenya Agents 12,096 Branches 12 Staff 6,469 ATMs 26 Rwanda Agents 324 Staff 240 Branches 14 ATMs 15 Branches 6 Tanzania Agents 144 ATMs 7 Staff 287 Burundi Agents 207 Staff 117

3 STABLE CREDIT RATINGS RATING AGENCY SOVEREIGN KCB BANK KENYA

B2 (Negative) B2 (Negative)

B+/B B+/B

4 Rates lowered across the region: CBR Kenya: 100 bps reduction to 7.25% Uganda:100bps reduction to 8.0% Further reduction by MPC Q1 2020 by 25 bps to 7.00% HIGHLIGHTS Tanzania: 200bps reduction of the Rwanda: 50bps reduction to 4.5% Responses to discount rate to 5.0% COVID-19 Pandemic

Cash Reserve Ratios lowered across the region by 100bps CRR Kenya: 4.25% Rwanda: 4.0% Tanzania: 6.0%

5 Provision of exceptional liquidity assistance to banks and increase in maximum Repurchase Agreements (REPOs) tenures in Kenya, Rwanda and Uganda. LIQUIDITY Q1 2020 Reduction of haircuts on government securities in Tanzania; From 10% to 5% HIGHLIGHTS for Treasury bills and from 40% to 20% for Treasury bonds.

Responses to COVID-19 LOAN Easing of loan repayment conditions for impacted borrowers and approval for Pandemic RESTRUCTURING banks to restructure the affected loans in Kenya, Rwanda, Uganda and Tanzania

Lowering of VAT, Personal and Corporation income tax rates in Kenya. FISCAL Expediting VAT refunds and deferment of tax payment obligations for the most INTERVENTIONS affected sectors in Rwanda and Uganda

6 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 Kenya to nurture and grow youthful and SME entrepreneurs 35,949 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

7 Juliana Githieya, Owner, Ashleys Mtaani Barber & Salon, • 2jiajiri beauty and personal care graduate. • Utilised a KShs. 5 million loan from KCB to open KCB FOUNDATION Ashleys Mtaani salon in Nairobi under the franchise CASE STUDIES agreement between Ashleys and KCB Foundation. • Employs 3 fellow 2jiajiri graduates in her business. • Makes on average KShs 700,000 per month.

Salome Malala, Owner, Birunji General Works Limited, Kisumu • Started off as a casual house help (mama nguo). • Studied welding and fabrication at Kisumu National Polytechnic under KCB Foundation’s 2jiajiri and GIZ’s E4D/SOGA – Employment and Skills for Eastern Africa Programme and also received toolkits. • Employs 3 fellow youth and undertakes major welding and fabrication works in Kisumu and neighbouring Siaya County.

8 MAINSTREAMING SUSTAINABLE DEVELOPMENT GOALS SUSTAINABILITY UPDATE •Cumulatively, loans amounting to KShs. 447 billion have been screened for ESDD compliance since 2015.

•In 2019 the Group adopted SDG 13 on Climate Action in line with the collective commitment to climate action by the founding banks of the recently launched Principles of Sustainable Banking.

•Commitment to be a carbon neutral business by 2028.

•26 staff engagements in integrating Sustainability in the new 2020 – 2022 Beyond Banking Strategy have been conducted reaching 50% of the total Group staff.

ALIGNMENT CLIENTS & CUSTOMERS STAKEHOLDERS PRINCIPLES FOR GOVERNACE & TARGET TRANSPARENCY & RESPONSIBLE IMPACT BANKING SETTING ACCOUNTABILITY

9 Macro-Economic Highlights

10 MACROECONOMIC HIGHLIGHTS

Kenya 34.1

8.5 7.5 7.6 8.8 5.4% 6.9 7.8 6.6 6.6 6.4 5.3 5.4 5.8 3.6 3.2 2.5 6.0 1.2 1.0% 4.2 5.6 1.5 0.7

AGRICULTURE MANUFACTURING REAL TRADE EDUCATION TRANSPORT & FINANCIAL & CONSTRUCTION ICT HEALTH MINING& 2019 2020 ESTATE STORAGE INSURANCE QUARRYING Growth Projection

Contribution to GDP 2019 (%) 2019 Growth (%)

Sources: -Kenya National Bureau of Statistics -IMF

11 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 3.5 3.5 2.0 1.8 2020 Projection 2019 Ethiopia Rwanda Tanzania Uganda Burundi South Sudan -1.6

-5.5

2019 2020 Growth Projection Source: IMF

12 Inflation Evolution (%)

Inflation Target Target Non Food MACROECONOMIC rate Upper Lower Fuel 7.5 6.58 6.37 HIGHLIGHTS 6.27 6.06 5.82 5.78 5.49 5.70 5.56 5.00 4.95 4.35 Kenya 3.83

3.1 2.5 2.2

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

Interest Rates Evolution (%)

12.51 12.51 12.47 12.47 12.39 12.46 12.47 12.43 12.38 12.24 12.29 12.19 12.19

9.0 8.5 8.25 7.25

7.08 7.41 7.17 7.17 7.29 7.31 7.28 6.90 6.62 6.65 6.56 6.60 6.65

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

13 USD/KShs. Average Monthly Exchange Rate

103.8 103.7 103.7 103.2 103.3 MACROECONOMIC 102.4 101.6 101.7 101.2 101.5 HIGHLIGHTS 101.1 101.1 100.8 100.2 100.4 Currency Movement MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2020 2020 2020

Exchange Rates, Local Currency to USD

3,797 3,707 2,290 2,289 1,900 1,826 930 902 160 130 33 28 Mar 2019

Mar 2020 Uganda Tanzania Burundi Rwanda South Ethiopia Sudan

14 Current Account Balance (% of GDP) MACROECONOMIC HIGHLIGHTS

Kenya -5.8 -5.8 -5.8 -5.8 -6.2 -6.9 -7.2

2015 2016 2017 2018 2019 March 2020 Diaspora remittances Restated Restated Restated Restated Restated 2020 Projected 1Q20: $ 707.3M 6% 1Q19: $ 665.8M 12 Month Private Sector Growth 8.9% 7.7% 7.3% 7.1% 7.3% 7.0% 6.6% 6.1% 6.3% 4.9% 5.2% 4.3% 4.4%

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

15 Channel Performance

16 Q1 2019

OUR CHANNEL AGENCY, BRANCH MOBILE INTERNET TELLER ATMS CONTRIBUTION 56% AND POS 9% 8% 27%

97% of transactions Q1 2020 performed AGENCY, BRANCH MOBILE INTERNET ATMS outside the TELLER 73% AND POS 4% branch 20% 3%

65% 11% decrease in average transactions / 40% decrease in Number of branch growth in tellerper day transactions. non-branch revenue to Q1 2019 70.3 Q1 2019 4.0

2.8B Q1 2020 62.6 Q1 2020 2.4

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

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

OUR CHANNEL 2,798 CONTRIBUTION 56.8 127 1,876 90 41.2 75 15% 13.4 646 Growth in Total

Mobile Loans Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20 Advanced

MobiTransaction type(%) Q1 2019 Q1 2020

49.8B 45.4 40.6 42.1 35.6 43.2B 16.5 14.8 2.5 2.5

Q1 19 Q1 20 B2C B2B C2B LIPA KARO

18 Value of Transactions No. of transactions Agency Revenue (KShs.B) (M) (KShs.M) OUR CHANNEL CONTRIBUTION 124

12.9 93 104 AGENCY 10.8 66 7.8 64 49 94% Growth in Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20 Agency Banking Revenue Agency Transaction type(%) Q1 19 Q1 20

37.8 36.8 29.2 27.4 19.2 15.1 16.4 14.7

1.7 1.3 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

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

126 9% 120 117 38 Reduction in 36 number of ATM transactions 3.7 21 3.4 3.3

Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20

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

6% 221 Growth in 204 average daily 202 transactions 12 11 per POS 10

Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20

21 Financial Performance

22 Government Securities KShs 203.7B BALANCE SHEET KShs 133.3B HIGHLIGHTS

Net Loans & Advances KShs 553.7 KShs 464.3B 31% Customer Deposits Growth in Total Assets KShs 552.2B KShs 740.4

Total Assets KShs 947.1 KShs 725.7B

Q1 19 Q1 20

23 Sectoral Loans Comparison Industry* KCB Mar 2020 LOAN BOOK 0.4%0.3% Mining and Quarrying PERFORMANCE 3.6% 2.7% Agriculture 4.2% 2.7% Energy and water 3.0% 4.3% Tourism, restaurants and hotels 3.9% 4.4% 6.8% 4.4% Transport and communication 4.2% 6.9% Building and construction 19.3% 7.9% Trade 13.0% 12.3% Manufacturing 14.8% 17.2% Real estate 26.8% 36.9% Personal/Household *CBK Data as at June 2019 * Group gross loans KShs.B 67 44 2 597

19%

LCY 484 FCY

81%

Mar-19 Retail Corporate Mortgage Mar-20

24 Asset Quality Review

12.8% 12.5% LOAN BOOK 11.8% 9.5% PERFORMANCE 11.1% 9.8% 7.9% 7.7%

2.8% 2.1% 1.0% 0.6% LCY FCY 1Q17 1Q18 1Q19 1Q20 Industry NPL (Kenya) NPL Group CoR

NPL Breakdown 16.4% 15.6%

10.5% 9.5% 8.3% 8.2%

3.4% 2.4%

CHECK OFF MORTGAGE CORPORATE SME & MICRO 1Q19 HY19 FY19 1Q20

25 Group Coverage Ratio LOAN BOOK PERFORMANCE 100

90

74.6% 80

70 62.9% 63.9%

65.3% 60 61.0% 60.8%

50

40

30

20

10

0 1Q18 1Q19 1Q20 CBK Coverage Ratio IFRS Coverage Ratio

26 2% 1% 1% BALANCED 48% 48% 47% DEPOSIT MIX

50% 51% 52%

1Q18 1Q19 1Q20 Corporate Retail Others

Currency Mix Deposits by type 1Q19 Deposits by type 1Q20 8% 7%

15% 21% 24%

62% 7% 65% 85% 6%

LCY FCY Demand Savings Term Call

27 Core Capital to RWA Total Capital to RWA Group Group STRONG CAPITAL 18.10% 17.10% 19.5% 19.0% BUFFERS 15.10% 15.3%

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

1Q18 1Q19 1Q20 1Q18 1Q19 1Q20

Kenya Kenya 16.4% 15.0% 15.2% 17.7% 17.2% 15.0% 14.5% 14.5% 14.5% 10.5% 10.5% 10.5%

1Q18 1Q19 1Q20 1Q18 1Q19 1Q20 Min. Core / RWA Core Capital / RWA Min. Total / RWA Total Capital / RWA

28 Net Interest Income KShs 15.1B P&L KShs 12.7B HIGHLIGHTS

Total Non Interest Income Profit KShs 7.9B KShs 6.0B before tax Up 5.0% Operating Expenses

KShs (9.1B) KShs (11.1B) 8.5% Growth Net Earnings Profit before tax growth to KShs 8.9B KShs 8.5B KShs 6.3B

Q1 19 Q1 20

29 Chart Title 50,000 Balance Sheet 45,925 47,332 Highlights 45,000

40,000

Other banking 35,000 businesses performance 30,000

25,000 Net loans & 20,000 17,988 Advances (KShs M) 16,373 14,726 15,000 13,491

10,000 6,467 6,192 5,000 2,672 2,876 703 1,408 - NBK KCB Tanzania KCB Rwanda KCB Uganda KCB Burundi KCB South Sudan

Q1 19 Q1 20

30 400 Chart Title 258 P&L 233 225 191 186 HIGHLIGHTS 200 103 98 114 54 73 Other banking 0 businesses performance -200 -139

PBT (KShs M) -400

-600

-800

-1000 -961

-1200 NBK KCB Tanzania KCB Rwanda KCB Uganda KCB Burundi KCB South Sudan

Q1 19 Q1 20

31 KCB Group KCB Bank Kenya Actual Actual Y-O-Y Actual Actual Y-O-Y KShs Billion 1Q19 1Q20 Change 1Q19 1Q20 Change Strong Balance Cash and balances with central Sheet 39.5 56.9 44% 35.0 44.6 27% bank Balances with other institutions 36.2 50.1 38% 14.4 25.6 78% KShs 89.6 billion Investments in Government & growth in Net 133.3 202.6 52% 118.0 144.8 23% Loans and Other securities Advances Net loans and advances 464.3 553.9 19% 424.8 463.1 9% (KShs 18.5 B in Q1 2020) Fixed assets 13.9 27.1 96% 10.0 15.5 55% Other assets 38.5 56.5 47% 32.3 35.4 9% Total Assets 725.7 947.1 31% 634.5 728.9 15%

Customer deposits 552.2 740.4 34% 491.0 580.1 18% Balances due to other banks 9.5 13.3 40% 0.9 3.1 248% Other liabilities 23.0 35.8 56% 21.3 28.2 33% Long-term debt 21.5 22.0 2% 18.7 19.2 3% Total Liabilities 606.2 811.5 34% 531.9 630.7 19% Shareholders’ equity 119.5 135.5 13% 102.6 98.2 (4%) Total liabilities and equity 725.7 947.1 31% 634.5 728.9 15%

32 KCB Group KCB Bank Kenya

Actual Actual Y-O-Y Actual Actual Y-O-Y 8% GROWTH IN KShs Billion EARNINGS 1Q19 1Q20 Change 1Q19 1Q20 Change

Interest income 16.8 20.2 20% 15.0 15.8 5% Interest expense (4.1) (5.2) 27% (3.4) (3.9) 12% Net interest income 12.7 15.1 18% 11.6 11.9 3% Foreign exchange income 1.0 1.5 51% 0.6 1.0 52% Net fees and commissions 4.0 5.4 34% 3.5 4.5 30% Other income 1.0 1.0 (1%) 0.9 0.7 (21%) Total other operating income 6.0 7.9 31% 5.0 6.2 24% Total other operating expenses (9.1) (11.1) (18%) (7.4) (7.7) (4%) Provisions for bad debts (1.2) (2.9) 149% (1.0) (2.5) 154% Profit before tax 8.5 8.9 5% 8.2 7.9 (4%) Tax (2.7) (2.7) (2%) (2.5) (2.4) (6%) Profit after tax 5.8 6.3 8% 5.6 5.5 (3%)

33 OVERVIEW OF KEY FINANCIAL RATIOS

FY 18 Q1 19 FY 19 KENYA GROUP 21.9% 21.9% 20.7% Return on Average Equity 22.4% 18.9%

48.3% 48.5% 45.9% Cost to Income 42.8% 48.5%

6.9% 7.7% 10.9% Gross NPL to Gross Loans 7.6% 11.1%

72.4% 60.8% 72.1% NPL Coverage 72.4% 65.3%

19.7% 18.0% 16.6% Debt to Equity 19.6% 16.2%

32.0% 32.2% 33.4% Non funded income to total income 34.2% 34.4%

3.2% 2.8% 2.8% Cost of funds 2.7% 2.7% 8.1% 8.5% 8.1% Net Interest Margin 7.4% 7.6%

0.7% 1.0% 1.8% Cost of risk 2.1% 2.1%

84.8% 84.1% 84.6% Loan to Deposit Ratio 79.8% 74.8%

8.0% 11.0% 17.4% Growth of Net Loans and Advances 9.0% 19.3%

8.0% 11.0% 27.7% Growth of Customer Deposits 18.2% 34.1%

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

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