KCB profit rises to Sh16.8 billion

KCB Group Chief Executive Joshua Oigara (right), with acting Chief Financial Officer Charles Langat at the release of results in Nairobi on February 26, 2015. PHOTO | SALATON NJAU |  NATION MEDIA GROUP

In Summary

• The net profit for the region’s biggest lender by geographical spread stood at Sh16.8 billion in the period under review, up from Sh14.3 billion in 2013.
• Net interest-income earned from lending activities grew by 14 per cent to Sh47.4 billion in the same period, with the loan book slightly growing to Sh283.7 billion from Sh227.7 billion in 2013.
• “The future is mobile banking and agency banking has been growing rapidly, which demonstrates where our future growth is hinged,” Mr Oigara said at a briefing in Nairobi Thursday.
• Customer deposits went up 23 per cent to Sh377 billion for the year 2014, up from Sh306 billion the previous period, with client numbers closing at 4.1 million from 2.5 million last year.

By RAMENYA GIBENDI
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Kenya Commercial Bank has posted an 18 per cent increase in profit after tax for the year ended December 2014, riding on increased lending and growth in other revenue streams.

The net profit for the region’s biggest lender by geographical spread stood at Sh16.8 billion in the period under review, up from Sh14.3 billion in 2013.

Net interest-income earned from lending activities grew by 14 per cent to Sh47.4 billion in the same period, with the loan book slightly growing to Sh283.7 billion from Sh227.7 billion in 2013.

Other incomes, including fees and commissions, increased 28.4 per cent to Sh22 billion, with Chief Executive Officer Joshua Oigara saying the growth underlines the lender’s divestiture from reliance on interest income.

“The future is mobile banking and agency banking has been growing rapidly, which demonstrates where our future growth is hinged,” Mr Oigara said at a briefing in Nairobi Thursday.

LION'S SHARE

Customer deposits went up 23 per cent to Sh377 billion for the year 2014, up from Sh306 billion the previous period, with client numbers closing at 4.1 million from 2.5 million last year.

The Kenyan operation contributed the lion’s share of the bank’s net earrings in the period, accounting for 81.1 per cent or Sh19.3 billion.

The NSE-listed lender said it would be seeking shareholders’ approval at the up-coming annual general meeting to form a non-operating holding company that will own the bank.

In a cautionary statement to the Capital Markets Authority, KCB said it was set to restructure its operations to establish a special vehicle that will ultimately own the lender.

The holding company is to oversee KCB Kenya and its regional units in Uganda, Tanzania, Rwanda, Burundi, and South Sudan and investment banking arm KCB Capital.

Central Bank of Kenya has developed guidelines that allow special entities to own over 25 per cent of the share capital of a bank in a bid to spread risks associated with subsidiaries and associated companies.

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