Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
South Sudan will be a branch like any other outlet in Kenya/FILE

Kenya

CfC eyes budding South Sudan market

South Sudan will be a branch like any other outlet in Kenya/FILE

NAIROBI, Kenya, Mar 8 – CfC Stanbic Bank is eyeing the South Sudan market as it seeks to strategically position itself in the increasingly competitive banking sector.

The bank’s Chief Financial Officer Edwin Mucai however disclosed that they are looking to play in the corporate space where they believe they have a competitive edge over other banks that have ventured into the virgin market.

“South Sudan will be a branch like any other outlet in Kenya. We still have not got all the approvals but we expect to be there anytime from the second half of the year,” the CFO stressed.

The bank is investing about Sh1.2 billion ($15 million) into the new outlet which will be released in three installments of Sh412 million ($5 million) each.

Besides capitalising on the corporate and investment banking, CfC Stanbic intends to continue focusing on its personal and business banking line where it posts higher margins and hopes to recoup its investment in branch network and infrastructure.

“The equity franchise is also very well positioned to take advantage of the switch that will happen from fixed income to equity. So, we are very excited about 2012 and we expect to deliver strong growth,” Mucai said in reference to business that they expect their CfC Stanbic Financial Services unit will underwrite if the growth momentum in the stock market is sustained.

Their bright outlook for the year is also informed by the anticipation that interest rates will ease; the exchange rate will continue to be stable and an expected improvement of credit growth in the second half of the year.

A member of South Africa’s Standard Bank Group, CfC Stanbic is the sixth largest commercial bank in Kenya in terms of assets (Sh150.1 billion) with 21 branches across major towns in the country.

The branch network has almost doubled since CfC Bank was merged with Stanbic Bank Kenya in 2008.

However, the de-linking of the insurance business into the CfC Insurance Holdings, which was completed in April 2011 and the 24 percent sale in the Stanbic Investment Management Services slightly affected the bank’s bottom line.

Advertisement. Scroll to continue reading.

In December 2011, profit after tax grew by 16.4 percent to Sh1.63 billion while the net interest income increased by 45.5 percent to Sh6 billion.

“Our profit before tax was up 40 percent (Sh2.79 billion), which in my view is very strong performance relative to the market but profit after tax was slightly lower because there was a tax adjustment following some clarification from KRA (Kenya Revenue Authority) on the structured leasing products,” Mucai explained.

Total income increased by 23 percent to Sh10.8 billion while fees and commissions grew by 19 percent to Sh2 billion on the back of higher transactional volumes.

He was also quick to defend the bank over accusation that they made super-normal profits from forex speculation that drove down the shilling, saying that trading revenue rose by only six percent to Sh2.5 billion.

The board of directors did not recommend any dividend for the year as it embarks on a profit retention strategy as it seeks to strengthen its capital position ahead of the planned rights issue.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Headlines

NAIROBI, Kenya, Mar 16 – The World Bank has given the Kenyan government USD 60 Million (Sh6.1 billion) to help combat the deadly coronavirus pandemic...