KCB profit stalls at Sh19.7bn
The KCB Group has announced flat growth of its full year net profit which stood at sh19.7 billion.
The stagnated growth was attributed to a one off staff severance package as well as growth in non performing loans.
KCB Group chief executive officer Joshua Oigara said the performance was also attributed by the restructuring process that led to laying off of about 316 employees at a cost of Sh2 billion in a cost cutting drive.
Stagnant economic growth in 2017 as well as the interest rate cap law saw the banks non performing loans grow 8.5 percent to Sh37.5 billion.
The banking group however managed to brow its top line with net loans and advances up 10 percent to Sh423 billion. This saw net interest income grow marginally to Sh48.4 billion.
However the bank was forced to make provisions for bad loans to the tune of Sh5.9 billion which stalled growth.
“The business maintained a strong capital position enabling continued focus on our core lending segments in retail and corporate banking, deliberate investments in key strategic themes,” Mr Oigara told investors.
KCB is the region’s biggest bank by assets which now stand at Sh646.7 billion.
The bank continues to focus on growing its mobile and digital banking channels with plans to invest close to Sh900 million shillings in a new mobile banking platform.
Already KCB has moved 57 percent of its banking transactions to the mobile channel with the new platform aimed at accelerating growth.
Mr Oigara said the new platform would enable the bank handle 100 transactions per second up from the current 35.
KCB plans to grow its non interest income by 40 percent to offset dipping income from loans issuance.
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