Corporate News
KCB Bank Group CEO Joshua Oigara during an investor and media briefing
to announce the full year 2014 financial results at the Hilton Hotel in
Nairobi on February 26, 2015. PHOTO | DIANA NGILA
By VICTOR JUMA, vjuma@ke.nationmedia.com
In Summary
- KCB's regional units made a combined net profit of Sh969.8 million in the year ended December, representing 5.7 per cent of the group’s net full year earnings of Sh16.8 billion.
- KCB said it was still keen on deepening its regional expansion with the planned entry into eastern Democratic Republic of Congo, Ethiopia, and Somalia.
A rebound of KCB’s
Uganda subsidiary helped Kenya’s biggest lender to post a 17.4 per cent
net profit growth and set a new earnings record for the banking sector.
The Uganda unit had reported a gross loss of Sh88.45 million
in the nine months through September, meaning that strong performance
in the fourth quarter supported the full year recovery.
“Uganda, which for the most of last year was in a loss position, is now profitable,” said Joshua Oigara, KCB’s chief executive.
The bank did not give a breakdown of its
subsidiaries’ performance but Mr Oigara said the units, including its
operations in the war-torn South Sudan, were all profitable.
The regional units made a combined net profit of
Sh969.8 million in the year ended December, representing 5.7 per cent of
the group’s net full year earnings of Sh16.8 billion.
The Sh969.8 million profit from the subsidiaries
was however less than half the Sh1.9 billion they made in 2013 when it
accounted for 13.3 per cent of the total Sh14.3 billion net profit.
The halving of the subsidiaries’ earnings is partly due to Uganda’s losses in the first nine months of last year.
KCB said it was still keen on deepening its
regional expansion with the planned entry into eastern Democratic
Republic of Congo, Ethiopia, and Somalia.
The bank first announced the plans in 2013 but is yet to set up operations in the identified markets.
Regional banking – which was pioneered by KCB — has
become popular among local lenders who see it as presenting
opportunities growth and geographical diversification opportunities.
Uptake of formal financial services in the region
is lower than Kenya’s but is expected to rise significantly in the
coming years as economic growth picks up pace.
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KCB operates in six markets, including Tanzania,
Rwanda, and Burundi, giving it the largest operation in eastern Africa
ahead of its rivals.
Kenya, however, remains the most important market
for the local lender and accounts for the bulk of KCB’s cash-generating
assets.
The bank’s overall profit growth, which saw it
maintain its dividend payout at Sh2 per share, was the result of
double-digit increase in interest and other income.
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