KCB in 4 percent half-year pre-tax growth

KCB Group on Friday announced its half-year trading results, recording a modest 4 percent growth in pre-tax profits. It’s operating profit has increased by 29 percent. In a statement that Business Times has seen the KCB Group’s Chairman, Peter Muthoka, told investors that the bank’s performance was on track but appeared modest owing to significant write-backs in the period to June 2008 that did not materialize this year. “This improvement may give the impression that our growth was modest but if you look at the actual operating profit our business grew by 29 percent,” Muthoka said. He however added that in comparison with the same period in 2008, KCB comes short because of the significant recoveries last year which KCB has not been able to realize over the last six months. Muthoka also noted that the bank’s future had been boosted by a successful implementation of a new core banking system that will anchor the launch of new technology-based products and services. “The new system will also enhance our efficiency due to increased automation of our operations,” he added. The bank’s good track record of profitability according to him continued to inspire confidence among stakeholders. As a result of enhanced investment in information technology, new branches, product rollout as well as employee recruitment, The Bank’s total operating income grew by 28 percent while total operating expenses increased by 27 percent. Due to improved risk management measures, the bank’s provisions for bad and doubtful debts went down by 23 percent. The increase in operating income was propped up by an impressive 77 percent growth in foreign exchange income.According to Oduor Otieno, group’s Chief Executive; the bank still has a very strong balance sheet in spite of a drop from our 2008 end-year position due to movements in balances with other financial institutions. Net loans and advances went up by 47% from KSh70 billion in June 2008 to KSh103.7 billion during the first half of the year; while deposits recorded a 23% increase to KSh127.6 billion up from KSh103.4 billion during the same period in 2008. The statement quoted him saying, “We continue to book new assets in our loan-book and are mobilizing more deposits to enhance our capacity to finance customer needs.” “Our strong capital position gives us the capacity to continue to market for new business and puts us among the top banks in the market which can finance large deals,” the Chief Executive added. Ends

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KCB in 4 percent half-year pre-tax growth