By Sharon Chweya
KCB Group’s profit for the first quarter of 2019 rose to 5.8 billion shillings from 5.2 billion shillings in Q4 of 2018 attributed to their loan books growth, stronger non-funded income channels and reduction in interest expenses.
The first quarter ended on 31st March, went well for KCB Group considering their potential growth in asset base through mergers and acquisition of Imperial Bank and National Bank of Kenya to be completed by the third quarter.
The Group has an asset base of 725 billion shillings, the largest branch network in the region with 258 branches, 946 ATMs, 16,642 POS/Merchants and agents offering banking services on a 24/7 basis in East Africa.
In Q1, 91 percent of the total transactions in Q1 were performed outside the branch, that is, 56 percent on mobile, 27 percent on agents, internet, and point of sale and 8 percent on ATM.
Revenues from the non-bank channels increased by 137 percent to 3.2 billion shillings driven by the disbursement of mobile loans which subsequently grew by 270 percent from 9.2 billion shillings to 33.8 billion shillings, the same period last year.
The loans and advances to customers rose by 10.9 percent from 418.62 billion shillings in 2018 to 464.26 billion shillings. The increase in loans and advances led to an increase in the group’s total income by 11 percent to 18.8 billion shillings and an 11.2 percent increase in the bank’s net interest income to 12.71 billion shillings. The asset base increased from 714 billion in 2018 to 725 billion, a 78 percent increase.
Customer’s deposit grew from 496.37 billion shillings in 2018 to 555.2 billion shillings, an 11.24 percent increase. The gross non-performing loans declined by 12.75 percent to 38.82 billion shillings, while the loss provisions nearly doubled by 93.76 percent to 1.16 billion shillings.
“The performance is as a result of a sustained strategy that is anchored on a simplified customer journey and products that provide solutions to our customers,” KCB CEO Joshua Oigara said on Wednesday. “We expect some inflationary headwinds in the economy as a result of lower rainfall in Kenya and increased fuel prices. The Group has the capacity to navigate through this and are therefore optimistic we will maintain our positive growth trajectory,” Oigara added.