KCB Group first-quarter profit jumps 12 per cent

From left: Group Chief Executive Joshua Oigara, Chief Financial Officer Lawrence Kimathi, Audit Director Charles Langat and MD Kenya Sam Makome.

Kenya: Kenya Commercial Bank Group saw its first quarter 2015 profit before tax rise by 12 per cent to Sh6.2 billion on the back of higher interest income, fees and commissions arising from new business lines.

Group Chief Executive Officer, Joshua Oigara, said the growth in profitability from Sh 5.6 billion over the same period last year was a result of a sustained push to grow non-funded income, as well as cost management initiatives across Kenya and the international businesses.

“The impressive earnings are as a result of a continued focus on the business to drive up non-funded income. Fees and commissions grew by 19 per cent as a result of increased transaction volumes and new products which we have rolled out to meet changing customer needs,” he said while announcing the trading results released in Nairobi yesterday.

“This is a confirmation that the catalytic investments we have been putting into the business through partnerships are increasingly bearing fruits. We see the partnership with Safaricom as a game-changer in the financial services sector. For us, such partnerships are meant to make financial services more accessible to the general population,” said Mr Oigara.

During the period under review, net interest income was up 11 per cent from Sh8.3 billion to Sh9.3 billion while total operating income stood at Sh13.9 billion from Sh13.1 billion, as the bank tightened its cost management initiatives.

Customer deposits increased by 27 per cent from Sh313.5 billion to Sh397.1 billion, as did shareholder funds which edged up 19 per cent from Sh66.8 billion to Sh79.4 billion, according to the bank, which also operates in Rwanda, Burundi, Tanzania, Uganda and South Sudan.

The Group total assets increased 24 per cent from Sh411.4 billion to hit the half a trillion mark at Sh510.3 billion, cementing the bank’s position as the largest lender in the region by assets. Oigara said the bank has recently heightened its investment in new business lines, search for strategic partnerships and deepening existing ones as a spring-board of its Pan African agenda.

insurance agency

The Group launched the newly created KCB Insurance Agency business recently with an eye at growing earnings from new business lines.

Last month, it launched its Islamic Banking unit as it sought to tap into the growing demand for Islamic financial products across the East African region. The launch of “KCB Sahl Banking” paved the way for the full roll-out of Sharia’h compliant products and supports the financial inclusion agenda.

In the coming months, KCB plans to deepen its investment in the digital payments platform as Kenya and the region move into a cashlite economy billed as the next frontier for growth in the financial services sector.