KCB seeks to deepen investment in the digital payments space

by Elayne Wangalwa 0

Financial services firm KCB Group has posted a 12 per cent growth in its pretax profit for the first quarter of 2015.

Buoyed by growth in its interest income margin as well as new business lines in fees and commissions, the group’s profit before tax rose to 6.2 billion Kenyan shillings in comparison to 5.6 billion Kenyan shillings registered in a similar period the previous year.

“The impressive earnings are as a result of a continued focus on the business to drive up non-funded income. Fees and commissions grew by 19 per cent as a result of increased transaction volumes and new products which we have rolled out to meet changing customer need,” KCB Group CEO Joshua Oigara said during an investor briefing.

Since the introduction of the mobile money platform, the group has managed to provide to its customers an array of services opening up the landscape of financial inclusion in the region. In the last one year, the lender’s customer transactions with M-Pesa have tripled to more than 125 billion Kenyan shillings.

“This is confirmation that the catalytic investments we have been putting into the business through partnerships are increasingly bearing fruit. We see partnerships with Safaricom as a game changer in the financial services sector,” Oigara said.

With six subsidiaries across the East African region, the group’s net interest income was up 11 per cent to 9.3 billion Kenyan shillings while net loans and advances were up 27 per cent to 297 billion Kenyan shillings.

Amid a tough operating environment in its South Sudan subsidiaries, East Africa’s largest commercial bank in terms of assets saw the group’s total assets grow by 24 per cent to 510.3 billion Kenyan shillings.

Speaking in regards to its South Sudan and Burundi subsidiary that are currently rocked with skirmishes Oigara said, “South Sudan is not doing well our loan book is down by 30 per cent…As for Burundi it is too early to tell but we are working closely with the government and the private sector and we are still running our business, we are confident”.

During the investor briefing it was established that the lender is looking to deepen its investment in the digital payments platform. The bank is also seeking to leverage on developments in technology to further deepen financial inclusion in the East African region.

According to reports, Kenya has greater access to financial points than its neighbours. Furthermore, Financial Sector Deepening (FSD) Kenya states that 77 per cent of the country’s population lives within 5 km of a financial access point compared to 35 per cent and 43 per cent in Tanzania and Uganda respectively.