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Jamii Bora profit jumps 129pc on loan book growth

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From left- Jamii Bora Bank chief executive officer Samuel Kimani, chief commercial officer Timothy Kabiru and the bank’s Chairman James Mwangi Gacheru. Photo/Salaton Njau

From left- Jamii Bora Bank chief executive officer Samuel Kimani, chief commercial officer Timothy Kabiru and the bank’s Chairman James Mwangi Gacheru. Photo/Salaton Njau  

By CHARLES MWANIKI

Posted  Thursday, August 22  2013 at  19:35

In Summary

  • The lender’s net profit rose to Sh42.69 million compared to Sh18.57 million in the first half of 2012.
  • The increase in net interest income from Sh99.8 million to Sh176.2 million helped the bank absorb a rise in staff costs, which doubled from Sh42.2 million to Sh94.6 million as the bank expanded.
  • The bank’s assets have nearly doubled to Sh4.68 billion in June 2012 from Sh2.4 billion in June 2012, with the chief executive officer Samuel Kimani saying it intends to raise this further by the end of the year.

Jamii Bora Bank has reported a 129 per cent rise in half-year net profit, lifted by strong growth in its loan book.

The lender’s net profit rose to Sh42.69 million compared to Sh18.57 million in the first half of 2012. The increase in net interest income from Sh99.8 million to Sh176.2 million helped the bank absorb a rise in staff costs, which doubled from Sh42.2 million to Sh94.6 million as the bank expanded.

The bank grew its loan book from Sh387 million to Sh2.27 billion in June 2013, corresponding with a rise in customer deposits from Sh631 million to Sh2.14 billion in the same period.

The bank’s assets have nearly doubled to Sh4.68 billion in June 2012 from Sh2.4 billion in June 2012, with the chief executive officer Samuel Kimani saying it intends to raise this further by the end of the year.

“By the end of the year, we hope to get about Sh2 billion in deposits…our balance sheet by the end of this year should be about Sh7-8 billion,” Mr Kimani said in July when launching the bank’s bond.

However, total non-performing loans increased from Sh132.8 million to Sh263.8 million in the one year to June 2013, in line with the expanding loan book.

Jamii Bora has pegged its business expansion on increasing SME and mortgage lending, with the proceeds of the Sh1 billion privately placed bond being directed towards this.

The bond sale has marked the third time in two years that Jamii Bora is tapping the capital markets for cash. The lender raised Sh1 billion in two rights issues last year for branch expansion and to meet the regulator’s minimum capital requirement.

Results for the bond sale are expected to be out on Friday, following closure of the offer, with the bank hoping to raise at least 40 per cent of the issue or Sh400 million for it to be declared a success.

The bond was not rated but was guaranteed by the African Guarantee Fund for Small and Medium-Sized Enterprises Limited up to 50 per cent of the principal amount.

cmwaniki@ke.nationmedia.com