31 October 2013

Kenya: KCB Posts 17 Percent Q3 Growth to Sh15.2 Billion

Nairobi — Kenya Commercial Bank (KCB) has posted a 17 percent increase in pre-tax profit for the third quarter of the year recording Sh15.2 billion up from Sh13 billion for the same period last year.

Net interest income for the nine-month period grew by 12 percent to Sh24.3 billion up from Sh21.7 billion during the same period last year.

This growth is backed by increase in net loans and advances by 8 percent from Sh209 billion in September 2012 to Sh225.7 billion during the same period this year.

The KCB Group Chief Executive Officer Joshua Oigara attributed the results to top line growth, cost transformation, innovation and improved returns from international business.

"Our sustained profitability in the short term is a step-change towards a deliberate effort to support growth of the business in the long term very much in line with our strategic objectives," Oigara said.

The International Business improved by 81 percent pre-tax profit growth from Sh900 million in September, 2012 to Sh1.6 billion in September, 2013, contributing 10.7 percent to the Group profit.

Total operating expenses rose by 8 percent from Sh18.1 billion to Sh19.5 billion attributed to the increase is attributable to inflationary increase in cost of doing business in the region as well as a one off restructuring cost.

The group's balance sheet grew from Sh371.6 billion in September, 2012 to stand at Sh385.2 billion in September, 2013, a 4 percent growth.

He says that although customer deposits grew marginally from Sh296.2 billion in September, 2012 to Sh301.1 billion, going forward the growth trajectory will be fuelled up by the technology driven products recently launched.

"Going forward we plan to drive utilization of alternative channels to grow our non-funded income with the recently launched M-Benki that also incorporates the financial inclusion agenda," he added.

Oigara says the ongoing consolidation efforts will enable the bank to rein in costs, enhance employee productivity, improve customer service, grow customer numbers and efficiently utilize alternative channels.

"We are satisfied with the ongoing growth momentum of the business and are confident we shall achieve our target for the year," said Oigara.

Shareholder equity went up by 17 percent to Sh58.6 billion in September, 2013 from Sh50.1billion in September, 2012.

The price of the bank's shares at the Nairobi Securities Exchange (NSE) has moved up from the average of Sh29 in 2012 to the current price average of Sh50 per share with the bank's market capitalization has hit a high of Sh151 billion.

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