Mr Joshua Oigara, KCB chief executive. FILE PHOTO | NMG
Summary
- KCB defied a 3.6 per cent total interest income drop to Sh46.8 billion to post positive profit growth at a time when most banks have been announcing a decline in earnings following last year’s interest rates cap.
- Total non-interest income jumped 18.38 per cent to Sh17.5 billion in the period ended September 30, driven by a sharp rise in transaction fees.
- The lender’s interest expense on customer deposits on the other hand dropped by 13.17 per cent to Sh9.9 billion, improving its margins.
KCB Group, Kenya’s largest bank by assets,
has announced a 5.03 per cent growth in third quarter net profit to
Sh15.1 billion, helped by cost cutting and a strong growth in
transactions income.
The lender defied a 3.6 per cent
total interest income drop to Sh46.8 billion to post positive profit
growth at a time when most banks have been announcing a decline in
earnings following last year’s interest rates cap.
Total
non-interest income jumped 18.38 per cent to Sh17.5 billion in the
period ended September 30, driven by a sharp rise in transaction fees.
The
lender’s interest expense on customer deposits on the other hand
dropped by 13.17 per cent to Sh9.9 billion, improving its margins.
KCB’s
loans and advances dropped 4.39 per cent to Sh37.1 billion as the bank
adopted a cautious lending approach in wake of the control on cost of
loans.
Investments in government securities went up
1.92 per cent to Sh9.2 billion in the quarter compared to Sh9.1 billion
in a similar period a year earlier.
The non-funded income included earnings from foreign exchange trading, mobile banking and diaspora remittances.
Provisions
for bad debts decreased 7.75 per cent as total non-performing loans
jumped 16.69 per cent or by Sh4.4 billion to Sh30.9 billion in the
period.
Group chief executive Joshua Oigara said the
performance was achieved on the back of the effects of the interest
rates cap and an economic slowdown during the quarter, when the
political season set in.“Our business fundamentals remain strong,” said
Mr Oigara in a statement.
“As the business environment
evolves, it is important for the group to expand its revenue streams to
remain competitive. This aggressive focus on non-branch channels
leveraged on our Fintech strategy is paying off,” said Mr Oigara.
The CEO said KCB expects alternative revenue channels to be the lender’s growth driver in the next few years.
The
bank has pegged its future on its financial technology strategy that
rides on a digital platform to provide online services for its
customers.
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