KCB Half Year Results & Acquisition Of Imperial and National Bank
KCB Group has recorded a Ksh12.7 billion after tax for the first half of 2019 ending June, posting a 5% growth. The improvement in earnings from KShs12.1 billion reported the same period last year is attributable to growth in loan book and increased mobile channel activity.
Just like seen in many banking institutions, mobile phone transactions have grown exponentially with many customers operating from their gadgets as well as agencies leaving banking halls less busy. For KCB, Channel transactions done outside the branch increased to 96% of total transactions, up from 87% in 2018 driven by mobile channels.
Investment in technology generated positive returns and further helped drive efficiency and deepen access to affordable financial services in all markets. According to the institution’s CEO Joshua Oigara, prudent cost management has played a big role in the quarter’s performance.
The Group’s balance sheet increased by 12% to KShs. 746.5 billion, with deposits up 7% to KShs. 563.2 billion supported by continued strong growth in personal and transaction accounts and underpinning the Bank’s focus on providing superior customer service.
The loan book surged 14% to KShs. 478.7 billion, reflecting the strong lending pipeline primarily driven by the retail and corporate banking customer segment. The ratio of non-performing loans to total loans declined to 7.8% from 8.4%, well below the industry average of 12.7%.
According to the bank, its international bank subsidiaries have majorly contributed to its success in countries it currently operates in. This growth has been driven by balance sheet momentum with loans and advances registering a 23% growth.
“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.
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 KShs: 1.00 per share. Shareholders will be paid the dividend in November 2019.
