A surge in mobile loans helped KCB Group stay ahead of Equity Bank as the fight for customers shifts to virtual platforms.
KCB said it posted a five per cent jump in profit from Sh12.1 billion to Sh12.7 billion in the first six months of this year, buoyed by explosive growth in micro-loans.
“We had a strong second quarter and witnessed continued growth across our businesses segments. The investment in technology generated a positive return and further helped drive efficiency and deepen access to affordable financial services in all markets,” said KCB Group Chief Executive Joshua Oigara at a press briefing in Nairobi yesterday.
A five-fold increase in KCB’s mobile loans saw its profit-after-tax edge past that of its closest rival - Equity Bank by Sh700 million.
In its half-year results for 2019 that were released just over a week ago, Equity recorded a net profit of Sh12 billion, a growth of nine per cent from Sh10.9 billion that it earned in a corresponding period last year.
KCB’s mobile loans rose astronomically to Sh103 billion during the period under review from Sh18.8 billion in the same period last year.
This is against a slower growth in its loan book, which expanded by 14 per cent to Sh478.7 billion, driven by strong lending to the retail and corporate customers.
The group attributed the significant growth to its KCB M-Pesa platform launched last year, with the value of loans disbursed via the service during the period under review, jumping from Sh14.9 billion last year to Sh66.7 billion this year. In what signals the rising popularity of mobile money, channel transactions outside the KCB branches rose to 96 per cent, up from 87 per cent last year.
Equity Bank had said mobile loans worth Sh20 billion were disbursed virtually through its mobile virtual network - Equitel.
Transactions done outside the bank branch in both lenders stood at 97 per cent for Equity and 96 per cent for KCB. KCB also continued to pack billions into government securities, investing Sh132 billion, up from Sh110 billion last year.
Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.