Kenya Commercial Bank (KCB) Group Chairman Ngeny Biwott has announced the bank’s half-year trading results reflecting a pre tax profit of KSh11.7 billion, a 16-percent increase from KSh10.1 billion for the same period last year.
“This good performance also comes at a time when KCB has just been awarded ‘Best Bank in Kenya’ by Euromoney. This prestigious recognition is a very positive reflection on the significant progress that we have made over the past few years to grow our business in the East African Region through innovation, partnerships and new business lines,” said the Group Chairman.
The Global Credit Rating (GCR) also affirmed the national scale ratings assigned to KCB of AA and A1+in the long term and short term respectively with the outlook accorded as stable. The international business contributed 7.3 percent to the Group profits and we are planning to roll out mobile banking and agency services to the subsidiaries in the next quarter.
The group’s chief executive Joshua Oigara said: “Foreign exchange income also leaped by 25 percent from KSh1.78 billion during the same period in June 2013 to KSh2.22 billion this year following increased marketing activity for our foreign exchange business. Fees and commissions also went up by 13 percent from KSh5.04 billion in June 2013 to KSh5.67 billion this year following increased usage of our alternative channels such as M-Benki, agency banking and strategic partnerships.”
Recently, KCB and Safaricom signed an SME partnership deal that will allow over 1 million micro and SME businesses to effectively use technology to streamline their operations and at the same time open up new possibilities for them for expansion and growth through [email protected] This journey will revolutionize the SME sector by enabling entrepreneurs to scale up their growth on a one-stop-solution platform using mobile phones.
The Bancassurance profits grew by 482.7 percent (annual growth) from KShs21.4 million during the second quarter of 2013 to KSh124.9 million during the same period in 2014. Fees and commissions now stand at KShs102.6 million in the second quarter of 2014 against fees and commissions of KSh34.1 million in the same period in 2013. Total Assets for Bancassurance grew by 284 percent from KSh68.4 million to KSh263.2 million.
“Our operating expenses grew by 16 percent from KSh11.69 billion in June 2013 to KSh13.62 billion in June 2014 attributed to operating expenses relating to the ongoing upgrade in IT, and managing the additional business that is coming into the bank. However we have been encouraged with the reduction in our cost to income ratio from 51.0 percent to 49.6 percent during the six months, a 140 basis points improvement that is within industry norms,” said Oigara.
The Bank’s balance sheet grew by 19 percent from KSh370.91 billion in the first half of June 2013 to KSh439.70 billion this year, the largest in the region. Net loans and advances grew by 14 percent from KSh214.09 billion in the previous quarter of June 2013 to KSh244.01 billion this year following increased lending to the micro and small and medium enterprises in the economy. The Bank’s investment in government securities was modest with a 6percent increase from KSh88.21 billion in June 2013 to KSh93.33 billion in June 2014.
Following the successful tapping of long-term debt from IFC and Ghana International Bank that brought in an additional US$70 million, KCB continues to enjoy strong capital ratios and is in a position to take additional deposits and increase the asset book significantly. The funds will enable KCB to lend to SMEs and foreign currency mortgages.
The Bank continues to remain strong on all prudential ratios with core capital to total risk weighted at 15.9 percent, total capital to total risk weighted assets at 20.7 percent, core capital to total risk depositsat 16.8 percent and liquidity ratio at 40.9 percent. The Bank has an excess capital of KSh18.1 billion over minimum requirements to fund its growth.
KCB shares at Nairobi Securities Exchange (NSE) have increased from KSh47.25 at the beginning of 2014 to close in June at KSh51. KCB was amongst the most liquid counters with a turnover of KSh14.9 billion year to date ranking it second on the FTSE NSE Kenya 25 Index.