Kenya big Banks make the most profit

The three top banks, Barclays Bank of Kenya, Standard Chartered Bank Kenya and the Kenya Commercial Bank (KCB) realised over half of all the bank industry’s profits in the year. The largest bank in terms of branch network, KCB, posted the most impressive financial growth, while Barclays, the biggest bank in terms of customer deposits, saw its profits dip slightly. However, the latter still realised the most profits. Stanchart, the last to release its trading results, had the second highest earnings. Financial results for KCB reflected a 111 per cent growth in pre-tax profits from Ksh920 million ($12.8 million) in 2004 to Ksh1.95 billion ($27.1million). The bank attributed the growth to the rise in net interest income from Ksh3.7 billion ($52.4million) in 2004 to Ksh5 billion ($69.4 million) in 2005. This is a very strong perfor-mance by the KCB team. Total operating income was up 18 per cent from Ksh8 billion ($111.1 million) to Ksh9.4 billion ($130 million) in 2005 largely due to incremental interest earnings as a result of a change in the mix of our loan portfolio and a build-up of government securities fuelled by a significant increase in low cost deposits,” said the group managing director, Terry Davidson. As a result, the board has proposed the payment of a Ksh4 (0.5 US cents) dividend for every share held. This is double the dividend paid out in 2004. Barclays Bank of Kenya, using the new accounting standard that calls for removal of gains or losses of valuation of bonds from the profit and loss account to retained earnings, posted a profit before tax of Ksh5.4 billion ($75 million). This saw the bank revise upwards the 2004 profit before tax from Ksh5.3 billion ($73.6 million) to Ksh5.5 billion ($76.3 million). However, the bank returned a net profit of Ksh3.7 billion ($51 million), from Ksh3.8 billion ($52.7 million) in the previous year. The profits, representing a 2.5 per cent decline over the previous periods were attributed to the closure of 10 of its branches. The bank’s board declared a final dividend of Ksh14, which was the same as last year. “Growth in interest income mainly as a result of growth in lending volumes and a stable interest rate environment led to the impressive performance,” said Charles Ongwae, Barclays Bank’s finance and planning director. Standard Chartered Bank’s profit before tax were up 31 per cent to Ksh3.5 billion ($48.6 million) from Ksh2.7 billion ($37.5 million) in 2004. This performance according to bank chief executive Mike Hart ,was driven by strong revenue growth, prudent cost management and good risk management. “Through aggressive marketing and innovative products we were able to grow our loans and advances by 28 per cent to Ksh34 billion ($472.2 million), up from Ksh26.6 billion ($369 million)in 2004,” said Mr Hart. The board of directors has proposed a final dividend of Ksh3.10 per share, bringing to total dividend for the year to Ksh7.50 – a 15 per cent increase over 2004. ‘ allafrica.

March 2006
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