Capital FM (Nairobi)

18 April 2012

Kenya: KCB Chairman Foretells Happy Times

Nairobi, Kenya — Kenya Commercial Bank Chairman Peter Muthoka is projecting a 40 percent growth in shareholder returns for this financial year, owing to a robust business strategy being employed by the listed institution.

The bank declared a Sh1.85 dividend in 2011 that totaled Sh5.5 billion.

Muthoka credited the bank's ambitious two year transformation agenda for the results, which have improved its efficiency and spurred business growth, productivity and enhanced stakeholder value.

"The dividends are going to go up by about 40 to 49 percent," he announced.

"We have also seen the performance of shares in the Nairobi Securities Exchange going up and this is very encouraging because it's the result of the transformation agenda that we started in 2010," he added.

With 170 branches in Kenya, KCB is Kenya's largest retail bank by network and market capitalisation that stands at Sh280 billion. Two years ago, the bank launched a two year transformation agenda aimed at improving its services and efficiencies as part of its economic outlook to become a pan-African brand.

The bank launched operations in Burundi this month adding to its regional network in Uganda, Tanzania, South Sudan and Rwanda.

Muthoka was speaking at the construction site of the new KCB Bank Group Headquarters in Upper Hill, and he said that the Sh2.1 billion building will be one of the few establishments that comply with the globally accepted standards of being an environmentally safe green structure.

"The design includes use of natural light with facilities for recycling waste water and it incorporates mechanisms for efficient energy consumption including solar installations," he announced.

"The building will make use of smart technology to manage the consumption of energy and water resources," he said.

Project Manager Mbugua Kamau acknowledged that they are three weeks behind schedule in the construction of the building because of a prolonged excavation of the basement where they encountered extremely hard rock.

"We are a bit behind schedule but the main contractor (China Wu Yi Company Limited) has been recovering the time we lost by four days per month, and we are confident that by the end of August we should be back on the regular schedule," he revealed.

"The main contractor has achieved a constant cycle of completing a floor every nine days, made possible by implementing a pre-cast wall/floor methodology that ensures higher strengths and a neater finish of the ceilings," he added.

The KCB Group Pensions Fund is financing the "KCB Plaza" which joins a number of residential and commercial properties that the pension schemes have invested in order to generate returns that will sustain the growing number of retirees.

Among these properties include Lonrho House, the Simba Villas in Embakasi and various properties in parts of Nairobi that have an aggregate annual return of about 10 percent.

Muthoka said the bank has agreed to be the anchor tenant and will shift its headquarters from Kencom House in the Central Business District to the new building in Upper Hill once it is complete.

"The move augurs well for our business as it will give us the opportunity to relocate all our critical administrative units as well as our corporate Banking business to the more tranquil Upper Hill area. This will also suit our corporate customers who at the moment have to cope with limited parking space and congestion in the city centre." he added.

The building will be the tallest in Kenya scaling 24 floors and will feature over 450 parking slots and a total rentable space of 228,330 square feet.

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