KCB Group Limited post tax earnings rose to Kshs. 19.6 billion in 2015 up from Kshs. 16.8 billion in 2014 marking a 16% increase in profit after tax for the 12 months ending December 2015. The rise is attributed to the firm’s diversified business lines, operational efficiencies, non-funded incomes as well as higher contributions from the subsidiaries.
The tough macroeconomic environment in the East African region subjected the group to difficult times especially in Burundi and South Sudan. The second half of the year was particularly tough in the aforementioned countries. However, sustained business resilience and multiple market presence enabled the firm to balance off the pressure and register higher earnings.
KCB has adopted a strong business model for international business to stamp its presence in the East African region and beyond. The group plans on investing in initiatives that will support this expansion strategy as well as guarantee a more sustainable business in the future. The Group surpassed the 10 million customer mark and set up a Representative Office in Ethiopia to mark the major milestone. This is aimed at deepening its presence in the region.
Increased transactions volumes and rolling out products that are tailored to suitably meet customers’ demands drove up fees and commissions by 11% to stand at Kshs. 14.16 billion while a sharp growth in asset book led to a 9% rise in net interest income to stand at Kshs. 39.2 billion. For instance, through a strategic partnership and product innovation with Safaricom, KCB introduced a micro lending product that has revolutionized lending in this age-KCB Mpesa. Latest Bank statistics show the bank advanced over Kshs. 7 Billion in loans to over 5 million KCB-Mpesa customers instantly on their phones.
KCB is alive to the fact that in this competitive era, it cannot afford to lag behind in terms of operational efficiency and robust IT system. While making his remarks during the announcement of the full year results, KCB Group CEO Joshua Oigara said “We have continually made deliberate investments and focus on building a business around diversification, prudent cost management, a robust IT system while remaining synonymous with excellence in customer experience at all service points across the Group” The mobile transaction technology forms a major part of the products that will lead to the growth of the firm.
A strong regional franchise, capital buffers, a well-structured deposit–based funding model and a high level of liquid assets indicate that the KCB Group is capable of running stronger regional business as well as take up bigger projects across East Africa and beyond. A 14% growth of the Group’s balance sheet to hit Kshs. 558 billion further strengthens it to tackle the aforementioned tasks. This growth in the balance sheet was boosted by a 22% growth in loans and advances while balances with other financial institutions rose by 40%.
Total liabilities and equity increased by 14% attributable to 12% growth in customer deposits, supported by an increase in customer numbers and product base. Shareholders’ funds were up 7% while borrowed funds increased by 58% due to additional funding during the year to ease liquidity.