Kenya Commercial Bank profit climbs on the back of some mobile phone 'magic'

KENYA Commercial Bank Ltd., the East African nation’s biggest lender by assets, said full-year profit grew 16%, helped by its expansion in mobile banking.

Net income climbed to 19.6 billion shillings ($193 million) in the 12 months through December from 16.8 billion shillings a year earlier, Chief Financial Office Lawrence Kiambi told reporters Wednesday in the capital, Nairobi. 

Net interest income, the money earned from charges on loans, rose 9% to 39.2 billion shillings, he said. KCB, as the bank is known, approved 3.5 million loans via mobile phone in 2015, which was 47% of the total, Chief Executive Officer Joshua Oigara said at the briefing. 

Almost 70% of the lender’s transactions are driven by mobile and agency banking, he said. “We have revolutionszed lending through KCB Mpesa,” Oigara said in a statement, referring to the product that uses Safaricom Ltd.’s mobile-phone money-transfer system. 

“Lending has never been easier and faster than it is today because of this technology that allows customers to access funds instantly on their mobile phones and we see this as a key cog in our growth story.” 

The bank plans to become the first Kenyan lender to begin operating in neighbouring Ethiopia, where it expects approval from the authorities this year, Oigara said. 

The bank will focus on expanding its presence in the Democratic Republic of Congo (DRC) this year, probably through an acquisition, followed by Mauritius in 2017, he said. It’s also considering an entry into Somalia, Oigara said.

SOURCE: BLOOMBERG