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KCB SHARE SPLIT |
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Today, the KCB Group has the widest network of outlets in the country comprising 95 full-time branches and 35 satellite branches.
In market share, the Bank represents over 55% of the total banking outlets in Kenya. As a player in the global financial market, the group maintains working arrangements with over 400 correspondent banks throughout the world.
The KCB Group recently released its financial results announcing a 63% growth in pre-tax profits moving up from
KShs1.9 billion in 2005 to KSh3.2 billion in 2006. The Board also proposed a 10:1 Share Split for which secondary trading on the NSE commences on April 2, 2007.
Key Features of Results:
Pre-tax Profit:
Profit up by 63% from KShs1.9 billion in 2005 to KSh3.2 billion in 2006.
Attributed to:
- 26% growth in net interest income
- 15% increase in non-interest income
- 36% increase in foreign exchange revenue
Dividends:
The Board proposed a dividend payment of KShs6 per ordinary share which is a 50% increase over the KShs4 dividend paid out in 2005.
Total Operating Income:
Total operating income rose by 25% from KShs9.4 billion in 2005 to KShs11.7 billion in 2006.
Attributed to:
- investments in infrastructure to effectively handle increased customer volumes
- reduction in our cost to income ratio down from 73% to 67%
Balance Sheet Stats:
The balance sheet grew by 18%, up from KShs78 billion in 2005 to KShs92.5 billion last year. The group’s capital base now stands at KShs11.6 billion up from KShs10 billion in 2005, making KCB the second trongest bank in East Africa.
Customer deposits grew by 20% jumping from KShs64 billion in 2005 to KShs77 billion in 2006, Savings account balances increasing by 70%.
Net loans and advances grew by KShs9 billion (25%) from KShs36 billion in 2005 to KShs45 billion last year.
Gross non-performing loans:
Gross non-performing loans reduced from KShs13.25 billion in 2005 to KShs12.09 billion in 2006. Despite the large increase in new loans over the past few years the overall delinquency rate remained low.
Attribute to:
- successful collection and settlement strategies around the non performing loans portfolio
- the minimal migration of new loans to bad book which reflects good risk management.
Announcement of Share-split:
“We think that our growth in value has made the stock inaccessible to the retail investor which is not good for a mwananchi bank. As a result the Board has recommended a ten for one share split. This means that a holder of 10
shares with a current value of approx KShs220 each will subsequently own 100 shares with a value of KShs22 each”, says Davidson.
In November 2006 the Board approved a new 5 year strategic plan to continue to grow KCB’s footprint both in Kenya and the Region.
Future Plans:
- New core banking system – recently approved by the Board and to be implemented within 18 months.
- Expansion of branch network by opening at least 5 to 10 branches annually for the next 5 years.
- Focus on building world class infrastructure to be used as a platform to offer a wide range of banking products.
KCB has repositioned its subsidiary in Tanzania and looks into prospects for further expansion into the region e.g., Uganda, Sudan (already has two branches in Juba and Rumbek)
In Conclusion:
The winning combination of a great regional brand, the largest branch network in the region and a great team on the ground has propelled the bank forward and will stand it in good stead in the future.
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