[2007-08-15]  KCB to Open Third Branch
Kenya Commercial Bank will open another branch in Tanzania next month. This will bring the number of its branches in that country to three.

The bank's board has also approved plans to enter Uganda as part of its efforts to increase its presence in the East African region.


The announcements were made last week by the chief executive officer Martin Oduor-Otieno as he released the bank's half-year trading results.

The bank recorded a Ksh2.1 billion ($31.3 million) pre-tax profit for the first half of this year, reflecting a growth of 40 per cent over the same period last year.

Mr Oduor-Otieno attributed the bank's good performance in the first half of the year to increased business and improved operational efficiency.

The results show that the net interest income for the sixth months grew by 27 per cent to Ksh4 billion ($59.7 million) up from Ksh3.2 billion ($47.8 million) during the same period last year.

The bank's fees and commissions increased by nine per cent, going up from Ksh2 billion ($29.9 million) in June last year to Ksh2.2 billion ($32.8 million) in June this year.

According to Mr Oduor-Otieno, the improvement in fees and commissions resulted from increased volumes. The bank has not reviewed its tariffs and charges for the past five years.

Due to its ongoing expansion in product range and services across the region, the bank's operating expenses also rose by 14 per cent from Ksh3.6 billion ($53.7 million) to Ksh4.1 billion ($61.2 million).

Regionally, apart from being in Uganda and Tanzania, KCB has also made a foray into Sudan where it has branches in Juba and Rumbek. It has reported a significant growth in client base, with a balance sheet of over Ksh2 billion ($29.9 million).

Last week, Mr Oduor-Otieno said the bank will open five more branches in Sudan between now and next year. Its second branch in Tanzania (Dar es Salaam) was launched two weeks ago.

"We want to continue positioning KCB as the provider of affordable banking and financial services in this market. During the half-year, we have experienced a significant upsurge in business inflows, which has necessitated a commensurate investment in resources to handle that increase," he said, noting that much of the operating costs went into upgrading the bank's information technology and scaling up its marketing blitz.



In the half-year financial results, the bank registered a three per cent reduction in its cost to income ratio from 64 per cent in June last year to 61 per cent by June this year.

"We are beginning to benefit from our investment in systems and procedures that ensure high operational efficiency," Mr Oduor-Otieno said.

The bank has registered an additional Ksh10 billion ($149.3 million) in loans and advances since December 2006, with the "good" book growing by Ksh17 billion ($253.7 million) to Ksh51 billion ($761.2 million).








Source: All Africa