In the first quarter of 2016 that ended in March, KCB Group Pre-tax profit surged to KShs. 6.6 Billion. This was driven by the rise in interest income, stable earnings from subsidiaries and the prudent cost-management.
Growth efficiency was partly offset by higher cost of funds from 2015 and provisions for doubtful loans.
KCB Group Chief Executive Officer, Mr. Joshua Oigara, said the lender recorded an upsurge in lending and transactions performed through digital platforms.
“We are excited about the continued growth of the business across markets and we are confident that digital payments and mobile money will deliver significant growth for the Group. We see these two as key catalysts in deepening financial inclusion,” said Mr. Oigara.
Key Performance Highlights:
Total Assets: Up 9% from KShs. 510.2bn to KShs 556.8bn
Net Loans and Advances: Up 16% from KShs 297bn to KShs. 345.9bn
Customer deposits: Up 7% from KShs. 397.1bn to KShs.423.4bn
Shareholder Funds: Up 6% from KShs 79.4bn to KShs. 83.9bn
Long term debt funding: Up 54% from KShs. 12.72bn to KShs. 19.6bn
Profit before Tax: Up 6% from KShs. 6.2bn to KShs.6.6bn
Net Interest Income: Up 24% from KShs. 9.3bn to KShs. 11.4bn
Provisions for bad debts: Up 149% from KShs. 550Mn to KShs. 1.4Bn.
The 16% growth of Net Loans and Advances was as a result of The Corporate and Retail business as well as the increase in use of KCB Mpesa which is currently worth over 10 Billion loans disbursed with over 7 million users since it started.
It is evident from the financial results that the Bank has been compliant with all the mandatory capital buffers as required by Central Bank of Kenya, hence their enhanced resilience which saw them being appointed as receiver manager of Chase Bank. This is also a confirmation that the Bank is strong and it holds a solid brand proposition and experience in East Africa region.
“The Bank continues to meet the capital regulatory ratios. The additional capital injection through tier 2 debt and the rights issue approved by shareholders last month is expected to improve the ratios considerably” said Mr Oigara.