PRESS RELEASE Thursday, October 29, 2015
KCB Group’ s Nine Months Pre-Tax Profit up 10% to KShs.
19.4 Bn as Bank Opens a Representative Office in Ethiopia
Profitability driven by growth in loans, non-funded income, subsidiaries and new business lines
KCB Group has received approvals to enter Ethiopia as it seeks new markets to boost business growth, the lender said while announcing its profit before tax that climbed 10% to KShs.19.4 Billion in the nine months ending September 2015.
The impressive earnings were buoyed by a substantial growth in net- interest income, fees and commissions and cost management initiatives.
Total Assets: Up 34% from KShs. 451.6 Profit Before Tax: Up 10% from KShs
| Billion to KShs. 607.3 Billion
Net Loans and Advances: Up 32% from
KShs. 264.3 Billion to KShs 347.6 Billion
Customer deposits: Up 35% from KShs.
350.1 Billion to KShs 471Billion
Shareholder Funds: Up 15% from KShs.
71 Billion to KShs. 81.8 Billion
Long term debt funding: Up 71% from
KShs. 13.2 Billion to KShs. 22.5 Billion
17.7 Billion to Kshs.19.4 Billion
Net Interest Income: Up 10% from KShs
The Bank said on Thursday that authorities in Addis Ababa had granted it clearance to run a Representative Office in the country, deepening the bank's regional expansion to enable it grow and sustain its regional business and open up trade with neighbouring countries.
KCB’s International Business—Uganda, Rwanda, Tanzania, Burundi and South Sudan— had an impressive nine months performance, growing by 74% year on year to contribute 12% of the Group’s profit, compared to 7% in the same period last year.
“The new strategy adopted for the International Business is gaining momentum and underpins our regional expansion model. The September 2015 numbers are an indication of a robust business model that we have continually adopted through initiatives that support customer-centricity to deliver affordability, efficiency and convenience in deepening financial inclusion across the East African region and beyond,” said KCB Group CEO Joshua Oigara adding the performance in the subsidiaries affirms the Bank’s growing role as a regional lender and a sustainable business.
“Across the six markets we operate in, while we experienced a relatively challenging economic environment on the overall, we have seen the business show great resilience arising from our deliberate focus on prudent cost-management and efficiency in operations, a trajectory we expect to continue in the remaining part of 2015,” said Mr Oigara
Mr Oigara said net interest income increased by 10% due to growth in the Bank’s asset book partially impacted by the high cost of funds especially during the last quarter of September 2015, while gross fees and commissions grew by 14%, attributable to new products and alternative channels tailored to meet customer needs and increased transactions volumes.
Total assets grew by 34% in what saw the Bank’s balance sheet clock KShs.607.3 Billion up from KShs.451.6 Billion recorded in September last year giving KCB the financial muscle it requires as it morphs itself into a stronger player in the wider East African market. The increase on the balance sheet is attributed to a 32% growth in loans and advances which constitute the highest proportion of the assets at 57%.
As a reflection of the Bank’s growing physical expansion and a wider product and service offering, customer deposits were up 35% due to customer number growth and deposits. KCB continued to deepen its investments on new business lines like KCB Mpesa, KCB Insurance Agency, KCB Capital and KCB Sahl Banking, the Islamic finance arm while new propositions like KCB Mpesa—a partnership product with Safaricom— continue to put up a strong show.
KCB-Mpesa continues to have a good story. As at September 2015, the total number of loans disbursed stood at KShs. 4.3 Billion with 1.9 million loans approved since March 2015. Mr Oigara said the Bank is on track to register more than 5 million new customers by the end of the year.
KCB hopes to ride on its strong balance sheet, diversified products and expansive regional and national footprint to deepen its financial inclusion agenda in the existing and into four new markets by 2020.
In 2013, Kenya signed a special status agreement (SSA) with Ethiopia, giving Kenyan companies the highest possible access to the country and focusing on areas of trade, investment, infrastructure and food security.
For the period ending September 2015, the Bank maintained a strong show on all prudential ratios with core capital to total risk weighted assets at
13.9% (CBK minimum-10.5%), total capital to total risk weighted assets at
15.6% (CBK minimum-14.5%) and core capital to total deposits at 16.7% (CBK minimum-8%).
The financials show that total expenses were up by 9% while the Cost to Income Ratio stood at 49.1% —remained relatively low and below the industry average demonstrating that the Bank is managing its efficiencies prudently.
For further information please contact: Judith Sidi Odhiambo on email: email@example.com
About KCB Group
KCB Bank Group is East Africa’s largest commercial Bank that was established in 1896 in Kenya. Over the years, the Bank has grown and spread its wings into Tanzania, South Sudan, Uganda, Rwanda, Burundi and Ethiopia completing the East African circuit in the year 2012. Today KCB Bank Group has the largest branch network in the Region of 250 branches, 962 ATMs and 12,000 agents offering banking services on a 24/7 basis in East Africa. This is complemented by mobile banking and internet banking services with a 24hour contact center services for our customers to get in touch with the Bank. The Bank has a wide network of correspondent relationships totaling over 200 banks across the globe and our customers are assured of a seamless facilitation of their international trade requirements wherever they are.
KCs Recent Accolades
· In September 2015, Global ratings agencies Standard & Poor’s (S&P) and Moody’s assigned KCB Group top ratings and a stable/negative outlook. S&P assigned KCB B+/B long-term and short-term credit rating while Moody’s gave KCB B1 stable. However, on October 27, S&P downgraded the bank's credit outlook to negative from stable, following a similar action on the country's outlook.
· In July 2015, Johannesburg-based Global Credit Ratings, an African-focused rating agency affirmed the national scale ratings assigned to KCB of AA (KE) and A1+(KE) in the long term and short term respectively, currently the highest rating for a Kenyan bank accorded by GCR.
· KCB Group featured prominently in the 2015 Banker's Top 1000 World Bank Rankings, emerging position 833rd, up 13 places from last year among Top 1000 banks globally, in rankings released last month. In the Africa rankings, KCB was 6th in Africa by Return on Capital, and 6th in Africa by Return on Assets.
· In June 2015, KCB Group CEO, Joshua Oigara, was listed by global news corporation Financial Times among the 25 Africans to watch in in the coming years.
· Capital Finance International (CFI) has feted KCB with the Best Green Bank - Kenya 2015 : in its Green Banking Awards while Banker Africa has picked KCB for three top awards –Best Regional bank, Best Commercial Bank and Most Socially Responsible Bank