Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
GROUP CEO Joshua Oigara at a previous briefing/FILE

Kenya

KCB Group posts Sh15.1bn pre-tax profit in 2016 first half

Group CEO Joshua Oigara attributed the rise in earnings to sustained operational efficiency and its strategy to grow non-funded income/CFM NEWS

Group CEO Joshua Oigara attributed the rise in earnings to sustained operational efficiency and its strategy to grow non-funded income/CFM NEWS

NAIROBI, Kenya, Aug 4 – KCB Group has posted a pre-tax profit of Sh15.1 billion in the first half of 2016, marking a 14 percent increase.

Group CEO Joshua Oigara attributed the rise in earnings to sustained operational efficiency and its strategy to grow non-funded income.

“We have had a strong sense of results growing at 14 percent in terms of our earnings so far this year across our businesses, which is despite the technical adjustments of the currency in South Sudan from a fixed rate to a floating rate which means that the exchange rate is determined by the market forces,” Oigara said while announcing the results.

Ngeny Biwott, the Group’s Chairman further termed the period under a review as a ‘fantastic story of resilience and dynamism’ owing to the bank’s ability to sustain strong momentum despite a tough operating environment in South Sudan, Burundi and Uganda.

Customer deposits declined by 2 percent to Sh433 billion from Sh443 billion and was attributed to South Sudan’s currency devaluation.

Long term debt funding was down 71 percent from Sh22.5 billion to Sh17.7billion while net provisions for bad debts were up 53.8 percent from Sh1.3 billion to Sh2billion.

Its non-performing loans grew by 36 percent with management saying it is pursuing more sustained recovery efforts to reverse the downward trend.

“Our Islamic arm, KCB Sahl, managed to bounce from a low start to post Sh43 million, owing to the bank’s increased investment, introduction of more niche products and a sharp growth in customer numbers,” Oigara explained.

The country’s biggest bank by total assets – at Sh560 billion – also posted a 16 percent growth of net interest income at Sh22.5 billion, driven by a stronger asset book and better yields while interest income surged 22 percent during the period.

Further, its total expenses were up by 6 percent as per the inflation rate, which brought the cost to income ratio down to 47.9 percent down from last year’s 48.6 percent.

Advertisement. Scroll to continue reading.

“Strong growth was also posted in the bank’s non-branch channels, with 70 percent of transactions being handled that way.”

For instance, KCB M-PESA had over Sh11.3 billion in loans disbursed, serving about 6.5 million customers since its launch in March last year.

Going forward, the bank plans to continue supporting SMEs saying they have been an integral part of the bank’s growth success.

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...

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...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

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

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

Coronavirus

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