By Macharia Kamau

Kenya Commercial Bank (KCB) has announced a 42 per cent increase in its pre-tax profits from Sh4.2 billion in 2007 to Sh6.01 billion, last year.

Post-election violence early last year, volatility of the shilling and spill-over effects of the global financial crisis have seen companies in other sectors report low growth or decline in profits.

The banking sub-sector has, however, reported impressive growth.

KCB Chief Executive Martin Oduor-Otieno attributed the bank’s performance to increased lending that resulted in the net interest income growing to Sh11.8 billion from Sh8.5 billion in 2007.

“We also witnessed an increase in business volumes across our branch network, which pushed foreign exchange earnings up by 94 per cent and fees and commissions by 28 per cent,” he said.

The bank’s total assets grew by 59 per cent to Sh191.2 billion from Sh120.5 billion during the previous year.

Speaking on Friday while releasing the financial results for last year, Mr Otieno said the outlook for the year looked difficult, but the Sh191 billion strong balance sheet should cushion the bank in the short term until the economy is up again, he added.

The board of directors proposed Sh2.2 billion-dividend pay out to its shareholders. And after three years of increasing its footprint in the East African region, KCB plans to venture into the wider African market. Other than Kenya, the bank has operations in Uganda, Tanzania, Rwanda and Southern Sudan.

It recently said plans were underway to open a branch in Burundi, which is expected to start running before the end of the year.

KCB chairman Peter Muthoka said the bank would streamline East African operations before going continental next year.

Future plan

“We will spend time and resources creating an efficient regional financial platform and consolidating existing business in all markets,” he said.

“Work is underway to create a roadmap for that expansion, which will enable us to stake a claim in the continental market by 2013 and we will aim at being a preferred financial institution in Africa with a global reach.”

The bank is also planning to add 30 new branches to its network across the country and 20 more in the other markets.

Otieno also said KCB Group’s mortgage arm Savings and Loan (S&L;) would be going regional, and will start with Southern Sudan.

“S&L; will be riding on KCB’s success to get into new markets like Southern Sudan,” he said.

The mortgage finance company has seen growth in the money lent out to developers and its mortgage book stands at Sh9.3 billion.

It posted a pre-tax profit of Sh465 million last year, a 68 per cent growth compared to 2007.