• Growth was attributed to stronger non-funded income channels, a healthier loan book as well as the reduction in interest expenses.
• There's a sustained strategy anchored on a simplified customer journey.
KCB Group's net profit for the first quarter grew 11 per cent to Sh5.8 billion from Sh5.2 billion the same period in 2018.
According to the lender, the growth was attributed to stronger non-funded income channels, a healthier loan book as well as the reduction in interest expenses.
“The performance is as a result of a sustained strategy that is anchored on a simplified customer journey and products that provide solutions to our customers,” KCB CEO Joshua Oigara said on Wednesday.
Revenue from the bank’s non-bank channels grew 137 per cent to sh3.2 billion driven by disbursement of mobile loans which grew 270 per cent to sh33.8 billion compared Sh9.2 billion the same period last year.
At least 91 per cent of total transactions were performed outside the traditional brick and mortar branches. This included 56 per cent via mobile, 27 per cent on agency, internet and Point-Of-Sale systems and eight per cent via ATMs.
Loans and advances to customers grew 10.9 per cent to Sh464.26 billion compared to Sh418.62 billion the previous year. This resulted in an 11.2 per cent increase in the bank’s net interest income to Sh12.71 billion.
Customer deposits also grew 11.24 per cent to Sh555.2 billion from Sh496.37 billion in the first quarter of 2018.
Gross non performing loans for the review period declined 12.75 per cent to Sh38.82 billion while the bank nearly doubled its loan loss provisions, growing 93.76 per cent to Sh1.16 billion.
“We expect some inflationary headwinds in the economy as a result of lower rainfall in Kenya and increasing fuel prices. The Group has capacity to navigate through this and are therefore optimistic we will maintain our positive growth trajectory,” Oigara said.
KCB’s performance places the bank second after Equity Bank which raked in Sh6.2 billion in after tax profit during the review period. This was a five per cent growth from Sh5.9 billion posted over the same period last year.
KCB is currently in the process of transferring part of the assets and liabilities of Imperial Bank Limited (In Receivership) and has also made a bid to take over National Bank of Kenya. Both transactions are targeted for completion in the third quarter of 2019.
“The two transactions are within the Group’s expansion strategy and give KCB a stronger edge to play a bigger role in driving the financial inclusion agenda in the East African region while building a robust and financially sustainable organisation,” Oigara said.