Bank of Africa profit rises 86pc

March 22, 2011

, NAIROBI, Kenya, Mar 22 – Bank of Africa Kenya (BOA) has announced an 86 percent increase in pre-tax profit for the year 2010, one of the highest in the banking industry.

The bank’s profit before tax rose from Sh260 million in 2009 Sh484 million last year. Profit-after-tax rose from Sh192.4 million in 2009 to Sh355.3 million last year, an 84 percent increase. Customer deposits also increased from Sh12.4 billion to Sh19.8 billion, an impressive 59 percent growth.

BOA Kenya Managing Director, Kwame Ahadzi attributed the stronger performance to a relentless focus on costs even in the face of expansion in Kenya as well as prudent lending practices. He added that the improved performance of the economy last year had also contributed to the bank’s growth.

The bank’s loan book recorded a 54 percent growth from Sh9.1 billion in 2009 to Sh14.1 billion in 2010. This saw interest income increase from Sh1.1 billion to Sh1.7 billion. Interest expenses rose from Sh616.2 million to Sh891.4 million.

BOA Kenya has embarked on an aggressive expansion plan increasing its branches from nine to 17 in 2010. The new branches opened last year were in Kericho, Eldoret, Ngong Road, Changamwe, Ongata Rongai, Embakasi, Nakuru and Bungoma.  This year, according to Kwame, the bank plans to roll-out seven more branches in Kisii, Meru, Nyali, Nanyuki, Kitengela, Bomas of Kenya and Greenspan in Nairobi’s Eastlands area.

“The growing customer base has necessitated fast tracking our branch expansion. We will continue to open new branches in different parts of the country so as to broaden our footprint in the market,” said Mr Ahadzi. BOA is also deepening its reach into the retail and SME market. “SMEs remain a strategic business sector for us. The SME sector has proved to be resilient and potentially huge growth area,” said the MD.

In December 2010, BOA Kenya received a $8 million (Sh648 million then) facility from the International Finance Corporation (IFC), the private sector financing arm of the World Bank, for onward lending to SMEs.

The bank has also developed innovative products such as Tiba Finance for financing doctors and health sector professionals to acquire equipment and expand facilities. “We will continue to innovate niche or targeted products that bring us closer to our customers,” explained Mr Ahadzi. 

In August last year, BOA attained a rating of A- and A1- for short and long-term outlook from the Global Credit Rating (GCR) agency. This strong rating underlines the favorable prospects of including stability, strength and risk management for the long term. 

BOA Kenya is a member of the Bank of Africa Group which has operations in 13 African countries namely, Kenya, Uganda, Tanzania, Benin, Burkina Faso, Ivory Coast, Madagascar, Mali, Niger, Senegal, Burundi, Djibouti and DR Congo. It also has operations in France.

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