1 May 2014

Kenya: KCB Considering Telecoms Business

LARGEST lender, KCB, said yesterday its first quarter of the year profits after tax rose 28.6 per cent and declared plans to in future follow its closest rival Equity in venturing into telecoms market.

The bank's profits increased to Sh3.9 billion up from Sh3.03 billion, uplifted by a 13 per cent growth in interest income to Sh8.3 billion and a 12 per cent climb in fees and commissions to Sh2.7 billion, chief financial officer Collins Otiwu said.

Loans surged by 10 per cent to Sh233.8 billion while deposits reached Sh313.5 billion, a nine per cent rise. Net non-performing loans however rose to Sh12.5 billion from Sh7.5 billion a year earlier, mainly on delayed payment by government to its main customers.

KCB said it has set a side Sh1.2 billion for NPL provisions-Sh850 million for Kenya and Sh350 million for war-torn South Sudan where four branches remain closed.

"Going forward, our strategy is to increase income from non-funded streams from the current 36.5 per cent to 40 per cent by the end of the year," Otiwu said.

CEO Joshua Oigara said plans to venture into telecoms were "on cards" while it hopes by end of this month to conclude a deal to deepen presence in Near Field Communication-supported card payments with entry into the PSV sector.

"This is the space that the whole of the industry will be moving into going forward and we already have plans which we will announce at an appropriate date," he said. Equity bank said mid last month, it will be rolling out telecoms services through its mobile virtual network operator licence later this month.

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