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
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
