KCB announce plans to venture into mobile banking, close branches

KCB Group Chief Operations Officer, Sam Makome (left), with, KCB Group CEO & MD Kenya, Joshua Oigara (centre) and, KCB Group CFO (Chief Finance Officer), Lawrence Kimathi address the audience during the half year financial results announcement at Radisson Blu hotel.
KCB Group has announced plans to venture more into mobile and agent banking in the coming future following a reduction in the revenue generated by branches.

According to The Groups Chief Executive, Joshua Oigara the group recorded improved performance from mobile and agent banking and will be looking to expand more into personal banking.

“Branches continue to contribute less and less of our business, we will invest more in mobile and ensure ATMs remain stable. We will no longer need to have branches when we have these agents since they almost bank the same,” said Oigara.
Data from the bank shows that transactional activity continued to shift away from branches, with non-branch transactions (mobile, agency banking, point of sale terminals and ATMs) standing at 87% of total volumes, compared to 13% handled at the branches.

Improved Earnings Supported by Non- Interest Activity and Cost Management saw KCB Group profit after tax for the first six months of 2018 surged to KShs.12.1 billion representing 18% growth.

“We are on track to delivering on our 2018 targets on the six strategic initiatives. We are seeing a more robust business that is responsive to our model of boosting non-funded activity, improving our financial strength and prudent management to consistently deliver stronger shareholder value,” said Mr. Oigara.

Total income was up 3% to KShs.35.6 billion from Kshs.34.6 billion, riding on a surge in both interest and non-interest income. The contribution of non-funded income at 32.3% of the total revenues was in line with the Group’s agenda to deliver at least 40% of the income from digital financial services by the year 2020.

Comparatively, operating expenses Declined 7% to KShs.18.5 billion from KShs.19.9 billion attributable to improved staff costs and loan loss provisioning.

During the period, KCB balance sheet grew by 6% to KShs.667.7 billion from KShs.630.6 billion, driven by higher deposits and gross customer loans in an environment of controlled interest rates. Deposits hit KShs.525 billion from KShs.482.8 billion, a 9% jump, resulting in an improved liquidity position.

The loan book expanded 4% to KShs.421.5 billion. KCB group continues to focus on improving credit quality, non-performing loans ratio improved by 130 basis points from March 2018 to settle at 8.5% as at June 2018. Shareholders’ equity grew 1% to KShs.98.9 billion in a period largely due to impact of implementing IFRS 9 that saw a significant reduction in statutory loan loss reserves. Retained earnings grew by KShs.12.5 billion to close at KShs.73 billion.

The Group’s core capital as a proportion of its total risk weighted assets closed the period at 15.7% representing a 520-basis point buffer on the Central Bank of Kenya statutory minimum. Overall, the Group’s total capital as a proportion of its risk-weighted assets stood at 17.2% against a regulatory target of 14.5%.

has announced an interim dividend of KShs 1.00 per share coming in the backdrop of 18 percent profit for the half year Board of Directors approved the payout which is set to be paid in November 2018.

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