KCB’s first half profit up 13pc on loans income

Corporate News

KCB Group chief executive Joshua Oigara during the release of the lender’s results in six months to June at the Hilton Hotel in Nairobi on July 30, 2015. PHOTO | SALATON NJAU 

By GEORGE NGIGI, gngigi@ke.nationmedia.com

In Summary

• KCB announced a Sh9.2 billion net profit in six months to June compared to Sh8.1 billion in a similar period last year, boosted by a 31.3 per cent growth of its loan book to Sh320 billion.

Increased interest income from KCB’s loan book raised its after-tax profit for the first half of the year by 13 per cent, keeping the lender in contention to maintaining its position as one of Kenya’s most profitable lenders.

The bank announced a Sh9.2 billion net profit in six months to June compared to Sh8.1 billion in a similar period last year, boosted by a 31.3 per cent growth of its loan book to Sh320 billion.

“We have consistently focused on growing new business lines and strengthening the subsidiaries to drive the business to higher profitability and guarantee its sustainability. This is bearing fruit as seen in the increased earnings,” said chief executive Joshua Oigara when he announced the results yesterday.

Kenyatta bank invests in Sh11bn real estate firm

Money Markets

Commercial Bank of Africa Centre in Upper Hill, Nairobi. PHOTO | FILE 

By GEORGE NGIGI, gngigi@ke.nationmedia.com

In Summary

• The lender booked a gain of Sh586 million from the consolidation transaction which in turn reduced its shareholding in CBA Properties by 24 per cent.
• CBA said the transaction was to enable it concentrate on its core business of banking, advisory and bancassurance.
• Mutuya Holdings, which had net assets of Sh11.1 billion as at end of last year, will be treated as an associate company of CBA.

Commercial Bank of Africa invested Sh2.3 billion in a little-known Sh11 billion property company last year as it sought to diversify its income streams.

The bank, the largest privately owned lender in Kenya and associated with the Kenyatta family, bought a 24 per cent stake in Mutuya Holdings Ltd in a share swap transaction.

It is not clear which properties Mutuya holds — as well as who its other shareholders are — but the Kenyatta family owns a vast estate including land, commercial buildings, hotels and schools.

“An opportunity for CBA Properties Limited to merge with a related company, Mutuya Holdings

Safaricom CEO says dominant player tag to slow its growth into global brand

Corporate News

Safaricom CEO Bob Collymore before the Senate ICT committee on July 30, 2015. PHOTO | JEFF ANGOTE 

By LYNET IGADWAH

In Summary

• Safaricom CEO Bob Collymore says curtailing Safaricom’s dominance would limit its target to grow into a global brand.

Safaricom chief executive Bob Collymore has told Parliament that the telecommunications regulator does not need to impose sanctions on it as long as it is not abusing its dominance in the market.

Mr Collymore told the Senate Committee on ICT on Thursday that curtailing Safaricom’s dominance would limit its target to grow into a global brand.

KQ posts Sh25.7bn loss on debt-fuelled modern fleet plan

Corporate News

Kenya Airways CEO Mbuvi Ngunze (right) and group finance director Alex Mbugua during the release of the airline's full year financial results in Nairobi on July 30, 2015. PHOTO | DIANA NGILA 

By VICTOR JUMA, vjuma@ke.nationmedia.com

In Summary

• Kenya Airway's Sh25.7 billion loss for the year ended March 2015 is nearly eight times the Sh3.4 billion net loss it reported a year earlier.
• KQ has been executing a debt-financed modern fleet plan that has pushed its total liabilities to Sh187.9 billion, more than its assets that are currently valued at Sh182 billion.
• The airline continues to operate, relying on additional debt to meet its obligations, including paying employees’ salaries and suppliers whom it owed Sh19.9 billion by end of March.

National carrier Kenya Airways’ record-setting Sh25.7 billion loss has wiped out shareholder wealth, taking it to a Sh5.9 billion negative capital position and adding momentum to the long-running erosion of its share price at the Nairobi Securities Exchange (NSE).

At Sh25.7 billion, the airline’s loss for the year ended March 2015 was nearly eight times the Sh3.4 billion net loss it reported a year earlier, reflecting the impact that the debt-fuelled aircraft acquisition spree has had on the company.

Higher sales drive East African Breweries’ after tax profit up 40pc

Corporate News

EABL employees work at the Ruaraka plant in Nairobi. PHOTO | FILE 

By MUGAMBI MUTEGI

In Summary

• East African Breweries reported on Friday a 40 per cent rise in after-tax profit to Sh9.57 billion for the year ended June.
• The brewer’s export business grew 60 per cent, despite political challenges in Burundi and forex challenges in Rwanda.
• The firm also restated its prior year pre-tax profit to Sh10.39 billion from Sh10.41 billion without offering an explanation.

Kenya’s East African Breweries reported on Friday a 40 per cent rise in after-tax profit to Sh9.57 billion ($94 million) in the year ended June, helped by rising sales volumes in its key markets.

The company, which is controlled by Britain’s Diageo, attributed the gains to higher revenue, which rose to Sh64.42 billion from Sh60.75 billion. Profit before tax was up 36 per cent to Sh14.15 billion.

Kenya’s revenue increased just 3 per cent, dampened by an increase in excise tax affecting Senator Keg imposed in October 2013.

Minister claims auditor ignored documents, got numbers wrong

Politics and policy

Treasury secretary Henry Rotich. PHOTO | FILE 

By KIARIE NJOROGE

In Summary

• Henry Rotich has challenged the Auditor-General’s claim that Sh66.8 billion from the 2013/14 budget was spent irregularly.
• He accused Mr Edward Ouko’s office of acting unprofessionally, getting their numbers wrong and ignoring supporting documents.
• The Council of Governors has also criticised county reports released earlier by Kenao, saying their responses to queries were ignored.

Treasury Secretary Henry Rotich has challenged the Auditor-General’s claim that Sh66.8 billion from the 2013/14 budget was spent irregularly by various ministries, departments and agencies.

Instead, he accused Mr Edward Ouko’s office of acting unprofessionally, getting their numbers wrong and ignoring supporting documents provided.

Obama: Investing in minority men is not ‘charity,’ it’s lucrative

Liz GoodwinSenior National Affairs Reporter

Students with President Obama at the launch of My Brother’s Keeper alliance at Lehman College in the Bronx, N.Y., in May. (Susan Watts/The Daily News via AP, Pool)

If you can’t appeal to their hearts, appeal to their pocketbooks.

That’s what the president and his administration are doing to sell his My Brother’s Keeper initiative, which seeks to help minority boys and young men succeed at school and in the workforce.

In May, the president said the business and nonprofit leaders who support My Brother’s Keeper are “not doing this out of charity” or to assuage societal guilt.

“They’re doing this because they know that making sure all of our young people have the opportunity to succeed is an economic imperative,” Obama said.