KCB half-year profit after tax jumps to Sh12.7 billion : The Standard

The Kenya Commercial Bank Group has posted 5 per cent growth in after-tax profit to Sh12.7 billion in the first half of 2019 ending June. The lender attributes the improvement in earnings from Sh12.1 billion reported the same period last year to growth in loan book and increased mobile channel activity. The group Chief Executive Officer Joshua Oigara said cost management further supported the performance in a relatively tough business environment. Channel transactions done outside the branch increased to 96 per cent of total transactions, up from 87 per cent in 2018 driven by mobile channel.

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“We had a strong second quarter and witnessed continued growth across our businesses segments. The investment in technology gea nerated a positive return and further helped drive efficiency and deepen access to affordable financial services in all markets,” said the Group CEO and MD. Financial Performance Net interest income increased by 5 per cent to Sh25.4 billion, attributable to a 14 per cent expansion of the loan book and a marginal 2 per cent increase in the interest expense. Fees and commissions increased by 31 per cent to Sh8.9 billion as revenues from digital channels, in particular, KCB M-PESA grew significantly powered by the new platform launched late last year. The value of loans disbursed via the service during the period of review increased from Sh14.9 billion in first half 2018 to Sh66.7 billion in 2019 half year. “Looking forward, we expect to build momentum in the second half of the year in line with increased economic activity across sectors, which should deliver topline growth and assist cushion asset quality,” said KCB Group Chairman Andrew Kairu.

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On key strategic business initiatives for the second half of the year, KCB plans to finalize the transfer of part of the assets and liabilities of Imperial Bank In Receivership Limited as well as complete the takeover bid for National Bank of Kenya by the end of the current quarter. Following the results, the Board of Directors approved a payment of an interim dividend of Sh1.00 per share. Meanwhile, the lender expects to complete its takeover of National Bank of Kenya (NBK) in a share-swap transaction by the end of this quarter, it added. Lawmakers put a dampener on the deal last week when they recommended that the deal, which is already open to NBK’s shareholders, be rejected by the government, which is NBK’s biggest shareholder. Market regulator CMA said the fate of the transaction will depend on KCB attaining the minimum threshold of 75 per cent of acceptance by NBK’s shareholders, who will get 1 KCB share for every 10 NBK shares.

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Kenya Commercial BankJoshua Oigara