Kenya's KCB group says pretax profit up by 12 per cent to Sh6.23b

Kenya Commercial Bank group's first-quarter 2015 pretax profit rose 12 percent to 6.23 billion shillings ($65.54 million) from the same period last year, helped by higher interest income, the bank said on Wednesday.

The bank's net loans and advances to customers rose to 297.03 billion shillings from 233.78 billion shillings, which resulted in an 11 percent rise in net interest income to 9.26 billion shillings.

In trading results released on Wednesday, KCB Group Chief Executive Officer, Joshua Oigara, said the growth in profitability from Shs5.6Billion 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,” said Mr Oigara.

“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 Oigara.

During the period under review, Net Interest Income was up 11 per cent from Shs8.3Billion to Shs9.3Billion while total operating income stood at Shs13.9 Billion from Shs13.1Billion, as the Bank tightened its cost management initiatives.

The Group total assets increased 24 per cent from Shs411.4Billion to hit the half a trillion mark at Shs510.3Billion, cementing KCB’s position as the largest lender in the region by assets while net loans and advances were up 27 per cent from Shs233.8Billion to Shs297Billion.  

KCB has recently heightened its investment in new business lines while seeking strategic partnerships while deepening existing ones as a spring-board of its Pan African agenda. Two weeks ago, KCB formally launched its newly created KCB Insurance Agency business with an eye at growing earnings from new business lines. The Insurance Agency proposition will initially be available in 98 of the Bank’s 187 branches in Kenya, before full roll out across the country and the region in the next 12 months.