Kenya’s regional bank to expand African markets

Regional financial institution, Kenya Commercial Bank (KCB) Group said on Thursday it is considering entering the Democratic Republic of Congo, Ethiopia and Somalia markets.

KCB Group Chief Executive Officer (CEO) Joshua Oigara told an investor briefing in Nairobi that his firm is currently holding negotiations with the Ethiopia on the possibility of entering the eastern Africa nation.

The bank currently has operations in Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan.

“We want to increase our presence in the African continent in order to tap into the new and emerging opportunities,” Oigara said when KCB released the full year financial results for 2014..

Oigara said for the year ending December 2014, the bank made a profit before tax of 260 million U.S. dollars, which is 15.3 percent jump compared to the 220 million dollars recorded in 2013. He said the profit increase was fueled by the double digit growth in the balance sheet and non-funded income.

The bank’s total operating income rose by 16 percent in the period under review to reach 613 million dollars due a sharp growth in fees and commissions.

According to the financial results, the bank increased its number of customers from 2.5 million to 4.1 million. “We are targeting ten million customers in the next two years,” said the CEO .

The CEO said the Ugandan subsidiary, which for the most of last year was in a loss position, is now profitable while South Sudan continues to post profits despite the instability in the country.

“We have long term intentions of remaining in South Sudan and in fact last year, we opened two additional branches in the country,” he said, adding the bank is currently facilitating the South Sudanese government to collect non-oil revenue.

The CEO said all subsidiaries in the six countries are now profitable. Kenya provided 81.2 percent of total revenues, while South Sudan, Tanzania and Uganda contributed 8.6, 3.5 and 3.2 percent respectively. Rwanda generated 2.9 percent while Burundi’s share was 0.6 percent of total revenue.

The financial institution currently has 10,000 agents. Oigara added that in 2014, the bank disbursed micro loans amounting to 11 million dollars over the mobile banking platform.

KCB Chairman Ngeny Biwott said Kenya’s National Treasury has given the KCB Group necessary approvals to launch Islamic Banking and Sharia Compliant products.

Biwott said the bank wants to be a big player in the financing of infrastructure projects. “We will achieve this by taking up more long-term debt from development finance institutions.”

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