Profit after-tax grew from Sh6.4 billion in the third quarter of 2011 to Sh8.7 billion in the same period of this year.
KCB Group Chairman Musa Ndeto revealed that their regional businesses registered a 70 percent growth in profit due to a jump in customer numbers, increased business volumes and a favourable macro-economic outlook in the East African Community markets.
“We are delighted to announce a steady performance in our trading results that generally reflects the momentum we have witnessed in the business attributed to our transformation agenda that has continued to spur strong performance,” he said.
He announced that the bank’s un-audited results for Quarter 3 showed profit before tax of Sh13.01 billion, up from Sh9.1 billion for the same period last year.
“The group’s business road map, which forms part of the Transformation Agenda was significant in managing our three pillars of growth and profitability focusing on increased revenues, reduction in costs and improved efficiencies,” he explained.
Two years ago, the bank launched a transformation agenda aimed at improving its services and efficiencies as part of its economic outlook to become a pan-African brand, and Ndeto confirmed that the bank had completed the roll-out of the agenda in Kenya and in its regional market.
“Cost to income ratio is now lower by 600 basis points to stand at 56.6 percent in September 2012, in comparison to 62.6 percent registered last year following improved efficiencies and cost management initiatives implemented in running the business,” Ndeto added.
The bank’s profitability was hinged on a 31 percent growth in net interest income from Sh16.6 billion in September 2011 to Sh21.7 billion this year.
The bank also witnessed a modest growth in fees and commissions from Sh6.92 billion over the same period last year to Sh6.96 billion this year.
KCB Group Chief Executive Martin Oduor-Otieno said; “The third quarter results reflect the improved macro economic outlook in the country over the recent months, which has been favourable.”
“We have witnessed a drop in inflation rates from 7.7 percent in July to 5.3 percent in September this year. The Central Bank Rate has also come down from 16.5 percent to 13.0 percent while the USD exchange rate has remained stable at Sh84.60 as of September this year,” he added.
Total operating income for KCB stood at Sh32 billion as of September 2012 compared to Sh26.2 billion last year, reflecting a 22 percent growth against the total operating expenses from Sh16.4 billion last year to Sh18.1 billion in 2012.
The bank’s balance sheet grew by 15 percent from Sh322.5 billion in September 2011 to Sh371.6 billion by the end of the third quarter this year as customer deposits increased by 17 percent from Sh252.4 billion in September last year to Sh296.2 billion this year due to continued mobilisation of funds.
Net loans and advances grew by eight percent from Sh193.9 billion to stand at Sh209 billion in 2012 due to increased marketing and improved relationship management in the retail, mortgage and corporate segments.
The bank reduced its base lending rate from 22 percent to 19 percent effective October 2012.
“Our strong capital position gives us the capacity to continue to market for new business. The outlook for the full year 2012 performance remains positive,” Oduor-Otieno said.
“We have a very strong business with a healthy balance sheet and good prospects for future growth. Our focus, going forward, is to utilise our strong balance sheet to grow shareholder value,” he added.