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Consolidated Bank profit jumps to Sh172m

NAIROBI, Kenya, Mar 21- Consolidated Bank joined the list of Kenyan banks posting impressive growth, announcing a 115 percent increase in net profits to stand at Sh172 million in 2010.

The bank posted Sh80 million in 2009.

Briefing investors on Monday, Consolidated Bank Chief Executive Officer David Wachira attributed the growth to a 56 percent rise in loans and advances, which stood at Sh6 billion, up from Sh3.8 billion.

"The bank has delivered good growth across key sectors in 2010 and we are confident that we can sustain this momentum into the future," Mr Wachira said.

Mr Wachira said the growth in loans was driven by the bank\’s focus on the SME sector, which he said had an impact on customer numbers that rose to 60,000 during the year.

This saw the bank\’s net interest income climb to Sh887 million from Sh636 million as assets under management grew to Sh10.4 billion from Sh6.8 billion.

During the period under review, customer deposits grew by 64 percent to Sh8 billion from Sh4.8 billion.

"The bank recognises the unique needs of local enterprises and during the year we went out to provide flexible solutions that address the needs for many growing businesses," he said.

Over the past two months, local banks have been releasing impressive 2010 financial results.

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Kenya Commercial Bank posted a 56 percent rise in pre-tax profit reporting Sh9.8 billion while NIC Bank\’s pre-tax profit leapt 71 percent to Sh2.6 billion. Last week, National Bank announced a 38 percent increase in net profit posting Sh2 billion.

To boost growth further, Consolidated Bank intends to open six new branches by June in strategic business locations that will sustain the bank\’s impressive growth.

With a 12-branch network, the bank has identified Nakuru, Eldoret and Nyahururu as potential growth areas for the bank.

The Central Bank has authorised 50 agents for Consolidated Bank, which Mr Wachira said, would be rolled out with the next two months.

Consolidated Bank is among one of the government institutions earmarked for privatisation.

According to Mr Wachira, the Privatization Commission had already presented a draft report to the Ministry of Finance to consider on the best way to exit the bank.

Without divulging much information, the CEO said they had proposed to have government\’s shares sold through an Initial Public Offer or bring on board two to three strategic investors.

"We are now waiting for the government to tell us what direction they wish to take," Mr Wachira said.

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