KCB posts 17% rise in its pretax Q3 results - CNBC Africa

KCB posts 17% rise in its pretax Q3 results

East Africa

by Elayne Wangalwa 0

Kenya Commercial Bank (KCB) has posted a 17 per cent rise in its pretax earnings in its third quarter results. PHOTO: Getty Images

Buoyed by the non-funded income, the group’s profit before tax stood at 17.7 billion Kenyan shillings for the nine months to 30 September 2014.

The positive performance has also been attributed to growth in transaction fees and improved efficiency through the use of alternative business channels.

In an interview with CNBC Africa, Joshua Oigara, group CEO at KCB said, “We have also seen good increment on our fees and commission which is also not a surprise because we have invested very strongly on the non-funded income, alternative channels, invested in agency banking… despite the reduction in our net margin this year compared to last year.”

The group’s fees and commissions on loans and advances rose by 20 per cent to 3.54 billion Kenyan shillings. While its loans and advances to customers grew to 264.3 billion Kenyan shillings up from 225.7 billion Kenyan shillings.

“We have seen strong growth on our loans and advances especially in the last quarter. We have seen an excess of 20 billion Kenya shillings in our loans book in the quarter and that is not a surprise because we see a growing momentum in quarter two and quarter three across many sector,” Oigara said.

Amid a tough operating environment in its Ugandan and South Sudan subsidiaries, East Africa’s largest commercial bank in terms of assets saw the group’s total assets plummet to 451.6 billion Kenya shillings. This is a 17 per cent increase from 385.2 billion Kenya shillings a similar period last year. Tanzania contributed 3.7 per cent, South Sudan 12.4 per cent, Uganda 3.2 per cent, Rwanda 3.2 per cent, Burundi 0.6 per cent and Kenya 77 per cent.

“This year Uganda has not done well largely because we have lost on a one big loan in Uganda this year. We are now working on the recovery position of that loan in Uganda … South Sudan’s business is growing but we did not see that faster base, we closed to branches in South Sudan but we have opened two new Branches in Juba in the month of October and November,” Oigara noted.

The lenders performance highlights the momentum of KCB’s strategy. The group has reported that the growth of agency is at 9,238 outlets with over 4 million transactions and 9.2 billion Kenya shillings deposits collected in 2014.

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