This archive report was first published on 15 August 2019.
Kenya Commercial Bank Group has posted a 5% growth in after-tax profit to Sh12.7 billion in the first half of 2019, ending June. The lender attributes the improvement in earnings from Sh12.1 billion reported the same period last year to growth in loan book and increased mobile channel activity.
According to the bank's Chief Executive Officer Joshua Oigara, cost management further supported the performance in a relatively tough business environment. Channel transactions done outside the branch increased to 96% of total transactions, up from 87% in 2018 driven by mobile channel.
"We had a strong second quarter and witnessed continued growth across our business segments. The investment in technology generated a positive return and further helped drive efficiency and deepen access to affordable financial services in all markets," said the Group CEO and MD.
Financial performance highlights include a 5% increase in net interest income to Sh25.4 billion, attributable to a 14% expansion of the loan book and a marginal 2% increase in the interest expense. Fees and commissions increased by 31% to Sh8.9 billion as revenues from digital channels, in particular, KCB M-PESA grew significantly powered by the new platform launched late last year.
The value of loans disbursed via the service during the period of review increased from Sh14.9 billion in the first half of 2018 to Sh66.7 billion in 2019 half year. Looking forward, the bank expects 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 Sh1.00 per share.
