KCB profit hits 10bn in nine months

Kenya Commercial Bank Group chief executive officer Joshua Oigara (left), Cabinet Secretary for Information, Communications and Technology (ICT) Dr. Fred Matiang’i during the launch of a mobile banking product dubbed KCB M-Benki.  Photo/SALATON NJAU

In Summary
Kenya Commercial Bank Group profit after tax rose 15 per cent in the nine months ending September 30 on account of growth in net interest income and improved performance of its regional businesses.
The bank’s chief executive officer, Mr Joshua Oigara, noted in a statement that its regional businesses in Uganda, Tanzania, Rwanda, South Sudan and Burundi improved remarkably, with all of them making profits.
The group is seeking to use technology to widen its agency network to cut costs and drive up customer deposits which stood at Sh301.1 billion as of the end of the third quarter from Sh296.2 billion last year.

 By JOSHUA MASINDE
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Kenya Commercial Bank Group profit after tax rose 15 per cent in the nine months ending September 30 on account of growth in net interest income and improved performance of its regional businesses.

The bank’s profit after tax rose to Sh10.8 billion in the period compared to Sh9.4 billion reported in the previous period.

Net interest income grew by 12 per cent to Sh24.3 billion up from S 21.7 billion, buoyed by increase in net loans and advances.

The bank’s chief executive officer, Mr Joshua Oigara, noted in a statement that its regional businesses in Uganda, Tanzania, Rwanda, South Sudan and Burundi improved remarkably, with all of them making profits.

“The Group’s performance was driven by cost transformation, top line growth, innovation and improved returns from international business,” Mr Oigara said.

The international business posted an 81 per cent increase in pre-tax profit growth to Sh1.6 billion from Sh0.9 billion in the review period, making a 10.7 per cent contribution to the earnings.

“This performance is in line with our expectations from subsidiary business and growth opportunities in cross-border trade in the region,” said Mr Oigara.

The Kenyan unit, however, made 89.3 per cent contribution to the profit before tax and 82 per cent of total revenue.

Total non-performing loans increased by 37.5 per cent to Sh17.6 billion from Sh12.8 billion due to the high interest rates which currently stand at an average of 16.9 per cent, according to the Central Bank.

In the period, total operating expenses rose by 8 per cent to Sh19.5 billion from Sh18.1 billion.

This was attributed to inflationary increase in cost of doing business in the region and a one-off restructuring cost.

The group is seeking to use technology to widen its agency network to cut costs and drive up customer deposits which stood at Sh301.1 billion as of the end of the third quarter from Sh296.2 billion last year.