Despite the high cost of credit and the volatile interest rates, the major players within the mortgage industry still declared double-digit percentage profit, writes ALLAN OLINGO
A look at financial statements of commercial banks that have a mortgage facility shows defiance to harsh economic environment as most of them have posted more than ten per cent growth in pre-tax profit during the six months period ending June 30.
Kenya Commercial Bank (KCB) group emerged as the most profitable lending institution as its half-year pre-tax profit jumped 48 per cent.
The group’s profit before tax (PBT) for the six-month period to June 30 swelled to Sh8.5 billion from Sh5.7 billion in a similar period last year.
“The growth in income reflects higher earnings on our good book as well as increase in business from retail, corporate and mortgage segments,” said Martin Oduor-Otieno, KCB Group Chief Executive.
Banks’ profits
KCB, mortgage book grew to Sh33.7 billion from Sh15.6 billion in 2009, translating to a 40 per cent market share.
“In the past one year, KCB has seen an upsurge in mortgage lending at 49 per cent following the roll out of this product into Rwanda, Uganda and Tanzania,” said Oduor-Otieno.
Similarly, Co-operative Bank group’s pre-tax profit rose 21 per cent to Sh5.01 billion from Sh4.14 billion in a similar period last year helped by a significant expansion in transaction-based income. Barclays Bank of Kenya (BBK), on the other hand, recorded an 18 per cent growth in profit.
The bank’s profit before tax increased to Sh6.31 billion from Sh5.34 billion in a similar period last year while customer deposits fell five per cent to Sh122.48 billion from Sh128.43 billion.
Barclays Managing Director Adan Mohamed attributed the bank’s profitability to growth in income and prudent cost management through investment in technology.
“The commendable results arise from the bank’s ability to continue with its sustainable growth momentum achieved over the years,” said Mohamed.
