Retirement benefit asset, investment properties, Loans and advances, joint investments are some of the factors that have contributed to KCB bank’s increase in assets to 567 Billion which is a growth of 29% from June 2014.
The increase in loans and advances by 31% has been a major contributing factor to the growth of the bank’s assets whereas profit growth was influenced by new business lines and the international businesses.
For the six months, profit before tax jumped from KShs. 11.7 Billion posted in June 2014 to hit KShs.13.2 Billion in June 2015 making it a 13% growth. However, according to KCB Group Chairman, Mr. Ngeny Biwott, the business shrugged off a relatively tough business environment especially in Burundi and South Sudan to post the improved earnings.
“We had a relatively tough macro-economic and political environment in most of the markets the Bank operates. In South Sudan and Burundi, we had economic shocks due to political tensions. Uganda, Kenya and Tanzania were hit by currency depreciation and high inflation while Rwanda was relatively stable” said Mr Biwott.
The Group saw its international business—Uganda, Rwanda, Tanzania, Burundi and South Sudan—turn in profits, contributing at least 10% of the Group’s earnings. Higher transaction volumes, increase in net interest income and gross fees and commissions attributed to new products and higher transaction volumes contributed majorly to the impressive growth.
Latest data on the KCB Mpesa proposition show the number of users currently stands at 2.1 million, while over KShs. 2Billion has been disbursed in loans for the past four months it has been in existence—an average of KShs. 130Million weekly. The financials released on Thursday show that total expenses were up by 9% although the Cost to Income Ratio were at 48.6% and remained relatively low and below the industry average.
Total liabilities increased by 30 % as a result of a sharp growth in deposits (at 26%) as customer numbers grew due to new business lines like KCB 4 Mpesa, KCB Insurance Agency, KCB Capital and KCB Sahl Banking, the Islamic finance arm. Long-term debt funding increased by 71% due to additional funding from development financial institutions to attain an optimal capital structure The Bank’s target in the short-term Mr Oigara said is to enhance financial inclusion to 10 million customers, from the current close to 7 million, by the end of this year.
The bank is looking to build partnerships in the telecommunication transport and energy sectors and with governments across the region. The bank will achieve this through its race to a million homes through an affordable mortgage proposition, an integrated product/service offering on bancassurance, investment banking and brokerage services, while pushing up mobile transactions and digital payments.
Going forward, KCB will focus on digital payments and SMEs. The bank recently committed to set aside Ksh 1billion in the next three years to support Enterprise Kenya the government flagship project that is geared towards spurring innovation among the entrepreneurs.
KCB is also planning to venture into four new markets in the next five years, with an eye on Ethiopia, Somalia, DRC and Mozambique.