ABC Bank in 41p.c growth

African Banking Corporation (ABC) Bank has recorded a 41 per cent growth in after tax profit (ATP) on the back of a resurgent economy.

For the first half of this year, the bank’s profit rose to Sh117 million from Sh83 million earned in a similar period last year.

The double digit growth in profitability was aided by an 82 per cent increase in non-interest income.

The income rose to Sh224 million, from Sh123 million, raising the bank’s total operating income from Sh392 million to Sh531 million.

However, bank operating expenses edged up by 24 per cent to Sh360 million, from Sh251 million.

The ongoing economic recovery has encouraged commercial banks to increase their lending as businesses borrow to enhance productivity.

Economic recovery

In its July market survey, the Central Bank of Kenya (CBK) said market perception by banks and the private sector on credit had improved considerably, an indication of the firming up of economic recovery.

“The private sector expectations of demand for credit has increased due to increased expectations for higher economic growth, low and stable inflation, and growing aggregate demand both locally and regionally,” said CBK governor Njuguna Ndung’u in the study.

CBK found that 60 per cent of private sector firms expect their demand for credit to increase by up to 20 per cent.

“The increased lending to the private sector is due to the positive economic and business outlook which is allowing businesses to borrow to expand their production capacity,” said Isaac Awuondo, managing director of CBA Bank.