Kenya Commercial Bank has posted impressive results in its third quarter this year. Recently, The Independent's Magnus Mazimpaka spoke with KCB Managing Director Maurice Toroitich on the strategy behind the bank's success.
How is KCB performing at the moment according to its 2011 third quarter results?
KCB Bank Rwanda Limited has made major strides since inception in December 2008. After two years of loss making, the bank has broken even in 2011. By the end of the third quarter of 2011, the bank's total profit before tax amounted to Rwf382 million as per the audited financial statements, which are yet to be released.
Can you put that success in figures?
As of September 30, 2011, our total assets have grown to Rwf53 billion, up from Rwf3 billion in the same period last year, which amounts to a 75 percent increase. Our loan book has grown from Rwf10 billion in September last year to Rwf28 billion as of September 30 this year--a 174 percent increase. Moreover, our total deposits stand at Rwf42 billion as of September 30 this year compared to Rwf23 billion during the same time last year, signifying a 77 percent increase. As a result, the bank reported a profit before tax of Rwf382 million for the quarter ending September 30, 2011 against a loss of Rwf1.8 billion in September 2010.
What share of the market do you have?
Currently the bank is enjoying a market share of about seven percent.
Describe the nature of the market; what is the trend?
The market has become very competitive with the entry of new players, and existing players also upping their game. The micro and macro-economic environment has become unfavourable with interest rates, inflation and exchange rates on an upward trend. While we anticipate that the growth so far achieved will be sustained, it will be in more demanding circumstances.
What new products have you or are you planning to roll out?
The bank will continue to innovate with a view to offer a one stop high-quality shop to its customers. We anticipate expanding our agency banking and our SME/Micro banking, which is supported by our technology-based delivery channels like Internet banking and mobile phone banking. Both these services enable our customers to enjoy banking services from the comfort of their houses or offices.
2011 is gone. What plans do you have for next year?
2011 has been a very good year to KCB Bank Rwanda Limited. We expect to continue enhancing our business further next year as we endeavor to reach the unbanked population. We shall seek to make banking for our customers a pleasant and rewarding experience. We shall leverage further on our existing and new partnerships in order to make this a wholesome experience.
From the clients' views, your rates need to be revised. What is your plan on that?
Our rates are very competitive and market driven based on the general cost of funds in the market and cost of bank operations. However, we shall continually seek to reduce the costs of our operations in order to make our services available at more competitive rates while also contributing to increased shareholder value.
What challenges is KCB facing in this market?
The structure of Rwanda market is not diversified, leading to a high concentration of closely correlated businesses in a few sectors of the economy. There is also a limited pool of highly qualified personnel in the market and therefore the cost of hiring and training staff adds to the cost of banking operations. Given the geographical location of Rwanda, there are obvious cost elements that also render operating costs high.
You must have solutions; what are they?
We have to create and serve new market segments in the economy. This will help to deepen financial access in the economy and create a spiral growth effect. Innovation and use of technology solutions should help to alleviate high costs of operation and improve shareholder returns. Partnerships and collaboration with other stakeholders should help to increase internal capacity to offer financial services to a wider section of the population at competitive prices. Finally, continuous training and best in class people practices will grow our staff capacity and ability to offer world class financial services.