26 October 2008
Nairobi — The Kenya Commercial Bank will open its first branch in Rwanda this week.
Martin Oduor-Otieno, KCB group chief executive made the announcement last Thursday when he released the bank's unaudited trading results for the third quarter.
The Rwanda operations will complete its regional representation with other operations being already places in Tanzania, Sudan and Uganda.
The bank maintained its growth momentum for 2008, reporting a 64 per cent increase in pre-tax profits for the first nine months of the year. The unaudited trading results for the third quarter show profit before tax of Ksh5.2 billion ($75 million) up from Ksh3.2 billion ($46 million) for the same period last year.
Funded income increased by 29 per cent from Ksh6.2 billion ($86 million) in September 2007 to Ksh8.04 billion ($115 million) this year.
Non-funded income contributed Ksh3.9 billion ($56 million), an 18 per cent growth over 2007, while foreign-exchange income doubled to Ksh1.1 billion ($16 million) up from Ksh555 million ($7.9 million) for the same period in 2007.
Total operating income stood at Ksh13.8 billion ($197 million) from Ksh10.5 billion ($150 million) for the same period last year, (representing an increase of 33 per cent) against total operating expenses of Ksh8.9 billion ($128 million) -- 35 per cent higher up from Ksh6.6 billion ($94 million) spent during the same period in 2007.
The bank's balance sheet now stands at Ksh183 billion ($2.6 billion) up making it one of the largest in the region. This represents a 67 per cent increase over the Ksh110 billion ($1.6 billion) balance in September 2007.
Net loans and advances grew by 53 per cent to stand at Ksh88.1 billion ($1.2 billion), up from Ksh57.7 billion ($82.4 million) in 2007 due to growth in business arising from a growing economy, increased marketing and improved relationship management in both the retail and corporate segments.
Deposits increased by 26 per cent from Ksh87.7 billion ($125 million) in September last year to Ksh110.6 billion ($1.6 billion) this year.
There was a marked increase in current account balances from Ksh45.1 billion ($64 million) in September last year to Ksh62.9 billion ($898 million) this year and fixed deposits, up from Ksh13.1 billion ($18.7 million) last September to Ksh18.9 billion ($27 million) this year.
The bank's performing loan book remained strong at Ksh86.3 billion ($12.3 billion), while the net non-performing portfolio remained below Ksh2 billion ($28.5 million).
The bank enjoys healthy prudential ratios following a successful second rights issue concluded in August with core capital to total deposit liabilities at 14.6 per cent (CBK minimum is 8 per cent), core capital to risk weighted assets at 15.5 per cent (CBK minimum is 8 per cent) and liquidity at 32.3 per cent (CBK minimum is 20 per cent).
As a regional bank, KCB has been in Southern Sudan since mid 2006 with two branches in Rumbek and Juba. "We are currently expanding the branch network by an additional nine branches in other cities in the country," said Mr Oduor-Otieno.
In addition, the bank has restructured the business in Tanzania to make it more competitive. It is expanding the branch network by seven branches in addition to the existing five branches. KCB opened its first branch in Uganda in November 2007 and now has three branches. Plans are underway to open additional eight branches.
"Our business in Uganda is picking up well and he expect to return a profit within the projected period," Mr Oduor-Otieno said. On the global financial crisis, he said that his bank is well positioned to withstand the effect of the global financial crisis because of its strong balance sheet, quality of assets, well diversified deposit base and strong liquidity.
"The fact that governments overseas are supporting the institutions at risk should help cushion the adverse impacts on our operations," he said.
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