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November 15, 2018

KCB posts 16 per cent growth in year to June

KCB group COO Sam Makome,group managing director Joshua Oigara and CFO Lawrence Kimathi during the release of the bank financial performance in Nairobi on August 16,2018. Photo/Enos Teche.
KCB group COO Sam Makome,group managing director Joshua Oigara and CFO Lawrence Kimathi during the release of the bank financial performance in Nairobi on August 16,2018. Photo/Enos Teche.

KCB group has announced an 18 per cent increase in net profit for the first six months to Sh12.1 billion from Sh10.3 billion recorded in the same period of last year.

The bank, with operations in Rwanda, Burundi, Tanzania, Uganda and South Sudan, attributed the profits to higher deposits, an expansion of the loan book, and a surge in interest and non-interest income. Deposits increased nine per cent to Sh525 billion from Sh482.8 billion.

 “We expect an improvement in the next half from the ongoing government’s interest rate repeal and strong economic growth amid the stability of the shilling,” CEO Joshua Oigara said yesterday.

The loan book expanded by four per cent to Sh421.5 billion from Sh406.9 billion. Oigara said high loans taken by large firms were directed to trade, construction, real estate and manufacturing sectors. However the highest ratio was recorded on personal loans at 35 per cent.

The bank adoption of IFRS 9 has led to reduction in loan loss reserves. This has seen an increase in shareholders’ equity by one per cent to Sh98.9 billion in the period under review. The non-performing loan ratio has improved from 9.8 per cent in last quarter to at 8.5 per cent in June.

Group finance officer Lawrence Kimanthi attributed this to International Financial Corporation’s approval as a tier 2 lender, expanding its lending operations to small and micro enterprises.

“The signing has strengthened the bank capital position. We want to bring performance of bad loans to decline to five per cent in a few years,” Kimanthi said. Total assets grew six per cent to Sh667.7 billion from Sh630.6 billion. The company will pay an interim dividend of Sh1 per share by November 30.

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