HomeFEATURED ARTICLEKCB first quarter profit rises to Ksh6.6 billion

KCB first quarter profit rises to Ksh6.6 billion

Growth driven by rise in interest income and efficiency

KCB Group profit before tax profit surged to Ksh6.6 Billion in the first quarter of 2016 ending March, driven by a rise in interest income, stable earnings from subsidiaries and prudent cost-management. The growth was partially hampered by high cost of funds carried over from 2015 and an increase in provision for doubtful loans.

KCB Group CEO Joshua Oigara said the lender recorded an upsurge in lending and digital transactions. “We are excited about the continued growth of the business across markets and we are confident that digital payments and mobile money will deliver significant growth,” he said.

Net loans and advances grew by 16% driven by corporate and retail businesses and increased use of KCB M-Pesa, which now has a customer base of more than seven million users and over Ksh10 billion worth of loans disbursed since its inception in March last year. This saw net interest income shoot up by 24%. Total assets registered an increase of 9% to Ksh556.8 Billion.

The bank said it will continue making deliberate investments and focus on building business around diversification, prudent cost management, a robust IT system while remaining synonymous with excellence in customer experience at all service points.

“The Bank continues to meet the capital regulatory ratios. The additional capital injection through tier 2 debt and the rights issue approved by shareholders last month is expected to improve the ratios considerably,” said Mr Oigara.

Loan loss provisions were up by 149% to Ksh1.4 billion, an indication of growing bad loans book. KCB has in the past one year developed expertise in micro lending, through a strategic partnership with Safaricom. The focus on the micro, small and medium enterprises is to not only harness the large numbers of businesses in the region but to also work with them to grow into mid-sized and even large corporates of the future.

“We have set out to gradually grow the Ethiopia business over time, currently operating as a representative office while strengthening partnerships with different stakeholders on the ground with plans of progressing it into a fullyfledged operation in the medium term” said Mr Oigara.

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