KCB Tanzania Limited, a subsidiary of KCB Group received Sh3.2 billion (20 million Euros) from the European Investment Bank (EIB) to boost its long term capital.
The bank says the funding whose receipts were booked in the third quarter of 2023, helped bridge a funding gap as the lender used the proceeds towards balance sheet expansion. In nine months of operations to September, KCB Tanzania loan book rose by 38 percent to Sh50.6 billion (Tsh836.6 billion), underpinning the bank’s 31 percent asset growth to Sh82.3 billion (Tsh1.3 trillion).
It marked a 77 percent growth in pre-tax profit to Sh2.3 billion (Tshs39.5 billion) in the period from Sh1.3 billion (Tshs22.3 billion) previously.
The growth in pre-tax profits was widely attributable to increased income from operations as net income improved by 38.6 percent to Sh6.9 billion (Tsh114.8 billion) from Sh5 billion (Tsh82.8 billion). The bank’s interest income grew by 35 percent in the period while non-interest funded income was up by 52 percent.
Customer deposits for the bank meanwhile increased by 25 percent but grew slower than loans showing an outsized demand for credit from the bank in contrast to funding.
Despite marking a loan book expansion in the nine-months review, KCB Tanzania marked an improvement in asset quality, as the percentage of non-performing loans to gross loans eased to 1.69 percent from 4.69 percent in September 2022.
KCB Tanzania is one of six of KCB Group’s regional units with other subsidiaries being located in South Sudan, Uganda, Rwanda, Burundi and DRC. The Group has been in the look-out for new acquisitions after the planned buyout fell through.
