Kenya Commercial Bank’s (KCB’s) regional subsidiaries have registered profit on the back of relative currency stability, helping the lender absorb the impact of the interest rate cap back at home, reports the Standard.
The six subsidiaries, including Uganda and Tanzania, collectively contributed Sh586 million in the January-September period, up from a loss of KSh842 million recorded in the comparable months of last year
Conversion losses cost KCB Sh1.1 billion, about a third of the Sh3.6 billion reported last year.
Group Chief Executive Joshua Oigara yesterday announced that the bank had grown its net profits by five per cent to KSh15.1 billion (UShs 529.8bn) for the nine months to September.
In the Kenyan operation, which is the biggest of the seven countries, regulation of lending rates since last August eroded earnings by five per cent.
Mr Oigara said in a note to investors that the bank had grown its non-funded income in fees and commissions by nearly a quarter.
“We shall continue to concentrate on growing non-interest revenue contribution by driving forex and trade revenues, in addition to optimising our agency card and mobile banking services,” he said, projecting fees and commissions would contribute 40 per cent of KCB’s revenues in three years. Interest income fell marginally at home despite total loans growing by 16 per cent, demonstrating the impact of the lending rates regulation that caps interest on loans at a maximum of 14 per cent.
During the period under review, however, the lender grew its net income derived from fees and commissions by 23 per cent.
Mr Oigara reported a sharp decline in the number of transaction done at the branch, with most customers switching to agents or SMS-based banking. Loans disbursed through its KCB M-Pesa mobile platform have more than doubled to Sh20 billion. Mobile banking was used to move Sh259 billion, more than half of the money transacted by the bank.