News Column

KCB net profit jumps 18 pc to Sh14.3 billion

February 27, 2014


Kenya Commercial Bank's net profit rose 18 per cent on reduced interest expense and jump in profitability by regional subsidiaries.,

Kenya's biggest bank by market capitalisation reported Sh14.3 billion after tax profit for the year 2013 compared to Sh12.2 billion recorded in 2012.

"This performance is aligned to our plan to strengthen our regional outfit through cross border trade transactions on our one –branch-banking platform," KCB group chairman Ngeny Biwott said during the investors briefing held Thursday.

The good performance by local banks however comes amid high interest rates that investors say threatens economic growth. Banks however blame Treasury saying it is the one responsible for the crisis due to excess borrowing.

Regional business grew 60 per cent to Sh2.4 billion in profit before tax up from Sh1.5 billion recorded in 2012. The bank said it now claims a hold of 50 per cent of the market share in South Sudan, three per cent in Uganda, eight per cent in Rwanda, one per cent in Burundi and three per cent in Tanzania.

Over the same period interest paid to depositors fell by 31 per cent to Sh8.6 billion saving almost Sh4 billion. This saw the total operating only rise marginally even with a one-off restructuring expense to streamlining its workforce."We have been encouraged with the reduction in our cost to income ratio from 57 per cent to 51 per cent during the year, a 570 basis points improvement," said Mr Joshua Oigara, KCB's Chief Executive Officer.

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Source: Nation (Kenya)

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