Kaburu Mugambi
12 August 2008
Nairobi — Kenya Commercial Bank mortgage subsidiary S&L's pre-tax profit for the first six months of the year rose to Sh208.4 million.
This was a 72.5 per cent rise from the Sh120.8 million reported over the comparable period in 2007.
A huge portion of income for the company came from interest on loans and advances, which grew from Sh233.5 million during the first half of 2007 to Sh379.3 million during the first half of 2008.
In total, interest income from other sources including government securities increased 55 per cent from Sh271.7 million to Sh421.1 million.
During the period ended June 2008, the company gave out loans and advances to its customers amounting to Sh7.1 billion compared to Sh4.6 billion loaned out in 2007.
Customer deposits on the other hand rose to Sh3.6 billion from Sh3.4 billion. However, the company's total operating expenses rose a massive 95 per cent to Sh254.2 million during the period from Sh130.4 million during the similar period in 2007.
Recently announced
A large amount of the expenditure went to staff costs and rental charges.
KCB recently announced a Sh3.5 billion pre-tax profit for the first half of 2008, up from Sh2.07 billion recorded during the similar period in 2007.
The increase was partly attributed to a 34 per cent increase in operating income and marked a 119 per cent jump in foreign exchange income. Income from loans and advances rose 37 per cent from Sh4 billion to Sh5.5 billion.
S&L, which previously was known as Savings and Loan, was acquired by KCB in 1972 to provide mortgage financing to its customers. The subsidiary experienced prolonged decline in profits in the 1990s and early 2000s.
However, it has witnessed a recent upsurge in its performance, growing from Sh13 million profit before tax in 2003 to Sh277 million in 2007.
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