S Su­dan cri­sis cuts KCB de­posits by Sh34 bil­lion

The group’s to­tal as­sets de­clined from Sh607.25 bil­lion last year to Sh570.10 bil­lion this year, but shows strong growth in Kenya

The Star (Kenya) - - News - RICHARD MUN­GAI @Richiy­mungai

KCB Group’s cus­tomer de­posits fell by Sh34.2 bil­lion in nine months through Septem­ber, the lender re­ported yes­ter­day, blam­ing de­val­u­a­tion of South Su­dan’s cur­rency.

The coun­try’s largest lender by mar­ket share said group’s de­posits stood at Sh436.8 bil­lion in Septem­ber 2016, a seven per cent drop from Sh471 bil­lion a year ear­lier.

KCB Bank Kenya de­posits, how­ever, posted a growth of 14 per cent as a “re­sult of cus­tomers seek­ing to place their money where they felt safe”, chief ex­ec­u­tive Joshua Oi­gara said.

“The pres­sure on the South Su­dan pound has con­tin­ued to grow since De­cem­ber 2015 when the cur­rency was floated. But there has been a con­tin­ued re­silience in other six mar­kets that we op­er­ate in,” he told an in­vestor briefing yes­ter­day.

The group’s to­tal as­sets also de­clined from Sh607.25 bil­lion in Septem­ber 2015 to Sh570.10 bil­lion this year. Oi­gara was, how­ever, op­ti­mistic the as­set book will bounce back to steady growth as the bank makes in­vest­ment in tech­nol­ogy sys­tems and dig­i­tal plat­forms.

The fi­nan­cial state­ment showed strong growth for Kenya, largely helped by pru­dent cost man­age­ment ini­tia­tives.

This helped push up net profit by 18.3 per cent in the re­view pe­riod by 15 per cent to Sh15.94 bil­lion from Sh13.92 bil­lion the year be­fore, help­ing it stay ahead of fierce ri­val Eq­uity which posted Sh21.5 bil­lion in the same pe­riod.

Net in­ter­est in­come rose 27 per cent from Sh28.4 bil­lion to Sh36.1 bil­lion af­ter net loans and ad­vances in­creased by five per cent from Sh347.5 bil­lion to Sh364.5 bil­lion.

Oi­gara said loans pro­cessed via mo­bile phones hit an av­er­age of 80,000 per day in Septem­ber.

“The suc­cess of our mo­bile plat­forms has en­abled the bank to process up to 91 per cent of out to­tal loan trans­ac­tions in the past nine months,” he said.

The lender’s pro­vi­sions for bad debt dropped 11 per cent from Sh3.8 bil­lion to Sh3.4 bil­lion helped by en­hanced re­cov­er­ies, up­grades and credit pro­cesses. Oi­gara said the bank is count­ing on tech­nol­ogy to drive the busi­ness.


KCB Group chief fi­nance of­fi­cer Lawrence Ki­mathi with chief ex­ec­u­tive Joshua Oi­gara dur­ing the re­lease of the group’s third quar­ter fi­nan­cial per­for­mance in Nairobi yes­ter­day

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