Companies

KCB posts Sh14.3 billion net profit in 2013

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KCB Group CEO Joshua Oigara (right) and chief financial officer Collins Otiwu during the bank's full-year 2013 results briefing on February 27, 2014. Kenya Commercial Bank has posted a 17 per cent rise in net profit to Sh14.3 billion. Photo/SALATON NJAU

Kenya Commercial Bank (KCB) has posted a 17 per cent rise in net profit for the year ended December 2013 helped by increased lending and lower loan losses provisions.

The bank said its after-tax profit increased to Sh14.3 billion last year compared to Sh12.2 billion in 2012.

KCB Bank’s loan book grew to Sh227.7 billion up from Sh211.6 billion resulting in an eight per cent increase in interest income to Sh33 billion.

“We are excited with this trend in our performance reflecting growth in all our business segments,” KCB Group chief executive Joshua Oigara said Thursday.

“We see a lot of potential demand for credit in the transport and communication, trade, manufacturing and agriculture sectors that supports our business growth in the medium term,” said Mr Oigara.

Provisions for bad loans reduced to Sh996 million from Sh2.01 billion in 2012, a 53 per cent drop, while its expenses increased by Sh1.8 billion to Sh27.1 billion.

The bank said the 7.1 per cent increase in operating expenses was because of a one-off staff restructuring cost of Sh1.1 billion carried out in the first half of last year.

Customer deposits grew by six per cent or Sh17 billion to Sh305.7 billion.

KCB Bank said going forward it will leverage on technology-driven products such as mobile banking and agency banking to mobilise customer deposits.

In October 2013, the lender launched KCB M-Benki, a mobile banking platform targeted at the unbanked population, which allows customers to open a bank account without physically visiting a branch.

“Since the launch, customer numbers have increased to nearly three million and the projection for year-end is five million customers. We are engaging the right partners to drive this financial inclusion agenda forward in the next 12 months,” Mr Oigara said.

KCB has lifted its dividend payment to Sh2 from Sh1.90 paid out in 2012.

The regional lender saw its operations in Burundi and Rwanda post profits after being in the red last year.

KCB Bank has temporarily closed three of its 21 branches in South Sudan following the political unrest that broke out in the oil-rich country in December last year.

READ: KCB says South Sudan unit still profitable despite political chaos

The listed lender is ranked the region’s biggest bank in terms of assets with a balance sheet of Sh391.5 billion. It has 2.5 million customers across its six subsidiaries in Eastern Africa. 

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