NAIROBI, Kenya, Apr 26 – Kenya Commercial Bank (KCB) registered a 27.4 percent growth in its profit after tax for the first quarter results of 2012 to Sh2.09 billion compared to Sh1.64 for the same period last year.
The KCB Group as a whole had a net profit of Sh2.43 billion for the quarter, increasing from the figure of Sh1.77 billion posted for January to March 2011.
The group chairman Peter Muthoka was confident that the continued implementation of its transformation initiatives over the last 12 months will keep up the growth momentum for the rest of the year.
“Despite the difficult operating environment and macro-economic challenges, KCB Group has continued to achieve excellent progress in all areas of its businesses and these results are in line with our expectations for the year 2012,” he said.
Higher inflation and increased investments to consolidate network and infrastructural expansion across the region impacted the bank’s total operating income that increased by 30 percent from Sh7.9 billion reported in March 2011 to Sh10.3 billion, as well as total operating expenses growing by 28 percent from Sh5.0 billion to Sh6.4 billion.
Net interest income rose 36 percent to Sh6.9 billion from Sh5.1 billion over the same period in 2011 with fees and commissions growing by 23 percent from Sh1.9 billion to Sh2.4 billion over the same period last year.
“This was due to growth in assets and improved performance in our regional subsidiaries. Our customer numbers have also continued to increase and currently the group has a customer base of 1.8 million,” the chairman disclosed on the net income performance.
The bank’s balance sheet jumped 23 percent from Sh271 billion at the end of the first quarter in 2011 to stand at Sh334 billion.
Growth in lending to the mortgage, Small and Medium Enterprises (SME) and corporate customers saw net loans and advances go up by 26 percent from Sh155 billion in March 2011 to Sh195 billion in March 2012.
Meanwhile, customer deposits grew by 24 percent from Sh209 billion in the first quarter of 2011 to Sh260 billion in March 2012, due to deposit mobilization initiatives to support our customer’s requirements.
“In the past one year, KCB has seen an upsurge in mortgage lending at 49 percent following the roll out of this product into Rwanda, Uganda and Tanzania. The corporate business also grew by 39 percent supporting the import business and trade financing,” KCB Group Chief Executive Officer Martin Oduor-Otieno explained.
Net provision for bad debts rose by 21 percent from Sh422 million for the first quarter of 2011 to Sh509 million, with a recovery on bad debts of 100 percent from Sh3 million in the first quarter of 2011 to Sh250 million in the first quarter of 2012.
“This was due to improved quality of the bank’s loan book and aggressive recovery of outstanding debts that are now being serviced,” the CEO revealed.
At the stock market, KCB share price rallied at 32.047 percent in the month of January to March 2012 outperforming the NSE 20 Share Index and all its banking beers which improved by 5.023 percent over the same period.
KCB saw good foreign investor appetite in Thursday’s trading session primarily due to foreign buyers looking to take advantage of the reverse gains made in the market in recent weeks, inching 0.6 percent lower, according to Standard Investment Bank.