Kenya: Kenya Commercial Bank Group (KCB) has announced a 18.2 per cent rise in pre-tax profit pushed up by positive economic growth in the East Africa region which saw all its subsidiaries make a profit. This is despite a difficult business environment in South Sudan.
The gross profit for year ending December 2014 was Sh23.8 billion compared to Sh20.1 billion pre-tax profit for the previous financial year.
"These impressive results are attributed to a double digit growth in our balance sheet as a result of growth in loans and advances," said KCB Group Chief Executive Officer, Mr Joshua Oigara said while releasing the group's full year results for the financial year ending December 31, 2014.
During the period under review, the bank recorded a rise in net interest income to Sh35.95 billion from Sh32.98 billion. It also benefited from improved macro-economic indicators with most economies posting better growth figures, reduced inflation, lower lending rates and higher remittances.
"This coupled with relative political stability has given businesses headroom to expand and ring-fence growth while making new investments. Going forward, we foresee stability across all economies where we operate despite the challenges in South Sudan," KCB Group Chairman Ngeny Biwott told investors.
KCB recorded a rise in total assets by 25.5per cent from Sh 390.9 billion to Sh490.3 billion while net loans and a increased by 24.6 per cent from Sh227.7 billion to Sh 283.7 billion.
Customer deposits increased by 23.4 per cent from Sh305.7 billion to Sh 377.3 billion. The bank experienced a 21.3 per cent increase in fees and commissions from Sh10.5 billion to Sh 12.7 billion.
Total operating income rose 16 per cent to Sh56 billion, much faster than costs, owing to steep rise in fees and commissions which were up 21 per cent to Sh12.7 billion. Income from foreign exchange trading rose 12 per cent from Sh3.7 billion to Sh4.2 billion. The group's regional subsidiaries are now all profitable including Uganda which has emerged from a loss making position while South Sudan remains also profitable despite political instability.
The level of non-performing loans eased from 8.1 per cent to 6.3 per cent during the period under review. Increased recoveries' were made in agriculture, building, trade, transport, real estate and households, helping drive growth.
The bank hopes to leverage on technology to drive financial inclusion and improve customer experience within the East African region. It recently rolled out M-Benki and Biashar@Smart which are based on mobile phone technology.
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