Kuda Reports 25.2m Pounds Loss, Faces 100m Pounds Fine for Governance Failings
Kuda Group, the owner of Kuda Microfinance Bank Limited, reported a significant loss of £25.227 million (N13.18 billion) for the financial year ending December 31, 2022, on a total income of £8.143 million.
“The wider loss in 2022 is due to the increase in staff costs and other operating expenses, relative to revenue as the company successfully scales,” Kuda stated in its financial report seen by MoneyCentral.
As of December 31, 2022, the Group’s total assets amounted to £120.6 million (N63 billion), up from £92.46 million (N48.33 billion) in 2021. Kuda Microfinance Bank Limited’s total assets were £94.2 million (N49.24 billion), representing over 79% of the Group’s total assets.
Kuda Microfinance Bank Limited (Kuda MFB), a digital-only bank providing retail banking services, had 4.9 million registered users on its app at the end of 2022, up from 2.4 million in 2021. The Group’s revenue, comprising fees, commissions, and interest income on loans, grew by 886% despite the year-on-year devaluation of the Naira in 2022.
Kuda MFB was fined £191,306 (N100 million) by the Central Bank of Nigeria (CBN) in 2022 due to infractions noted during an examination, including issues related to loss levels, corporate governance, and other compliance matters.
A notable concern in the FY 2022 accounts, as seen by MoneyCentral, was the auditor KLSA LLP issuing a disclaimer on the statement of accounts.
“We were unable to obtain sufficient appropriate audit evidence about the financial information of a significant subsidiary, Kuda Microfinance Bank Limited, which is included in the consolidated financial statements, and whose total assets were £94.2 million, which represents 79% of the Group’s total assets. The financial statements of Kuda Microfinance Bank Limited were audited by another auditor whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Kuda Microfinance Bank Limited, is based solely on the report of the other auditor. We have not been able to obtain the necessary confirmation or other appropriate audit evidence to satisfy ourselves as to the carrying value of Kuda Microfinance Bank Limited’s assets and liabilities at 31 December 2022,” stated Ketan Shah, Senior Statutory Auditor for KLSA LLP.
