KCB Lends More on MPESA platform, Reports Ksh19.2 Billion Profit After Tax

How Banks lock in defaulters

Kenya Commercial Bank Group PLC reported its quarter year financial results, recording a 6% surge profit after tax to KShs 19.2 billion for the nine months ending September 2019.

In its third quarter, KCB’s total income was up 10% from KShs. 54.2 billion to KShs. 59.7 billion, with non-funded income increasing 16.9% attributable to the digital proposition, largely KCB M-PESA. Loans disbursed under this platform improved from KShs. 23 billion last year to KShs. 98 billion.

Cost management initiatives across all its businesses, saw the net earnings increased from KShs. 18 billion, compared to a similar period last year. However, provisions for impairment increased to KShs 5.8 billion due to the increase in non-performing loans to total loan ratio which stood at 8.3%, below the industry average of 12.6%.

“We had a strong quarter and the business witnessed growth across various segments. We made continued strong investments in our capabilities to serve customers better. The international businesses have continued to improve while our digital offerings are witnessing increased activity, giving the business impetus to continue growing. Going forward, we are emphasizing driving more sustainable growth, excellent customer experience, and diversification,” said KCB Group CEO Joshua Oigara.

Net interest income expanded 7% to KShs. 38.7 billion from KShs. 36.3 billion primarily due to a growth in loan book and reduced cost of funds. The loan book closed at KShs. 486.4 billion from KShs. 435.3 billion, an improvement of 12%, reflecting the strong lending pipeline primarily driven by retail and corporate banking customer segments.

The group maintained a strong capital base well within both internal and regulatory limits, which saw the balance sheet expand by 12% to KShs. 764.3 billion from KShs. 684.2 billion, with deposits up by 11% to KShs. 586.7 billion supported by continued strong growth in personal and transaction accounts.

A latest review by rating firm S&P Global Ratings said that the bank is well placed to maintain its revenue stability in the current economic environment, reflecting the country’s relatively well-diversified economic base and strong private sector. With the acquisition of the National Bank of Kenya (NBK) KCB’s position is expected to be cemented in the domestic banking sector and strengthens its ability to access more business flows.

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Inzillia is an avid reader and researcher on matters finance, business, government affairs, culture, and human interest stories. Poetry too. Email: inzillia@urbwise.com