The Kenya Commercial Bank Group has posted 5 per cent growth in after-tax profit to Sh12.7 billion for the first half of 2019 ending June. According to the lender, the improvement in earnings is attributable to growth in loan book and increased mobile channel activity. The bank, which posted a pretax profit of Sh17.93 billion, said in a statement it boosted its provisions for bad debts to Sh3 billion during the period, from Sh0.8 billion a year earlier. “This big increase in loan provision is mostly due to the impact of day 1 adjustments done during implementation of IFRS 9 last year,” said Lawrence Kimathi, the group’s chief financial officer, referring to a new accounting standard. Non-performing loans dropped to 7.8 per cent of the total loan book, from 8.4 per cent in the same period last year, and well below the industry average of 12.7 per cent, said KCB, which also operates in Rwanda, Burundi, Tanzania, Uganda and South Sudan. Net interest income rose by 5 per cent to Sh25.4 billion mainly due to a 14 per cent expansion in lending. “We had a strong second quarter and witnessed continued growth across our businesses segments,” said Chief Executive Joshua Oigara. It expects to complete its takeover of National Bank of Kenya (NBK) in a share-swap transaction by the end of this quarter, it added. Lawmakers put a dampener on the deal last week when they recommended that the deal, which is already open to NBK’s shareholders, be rejected by the government, which is NBK’s biggest shareholder. Market regulator CMA said the fate of the transaction will depend on KCB attaining the minimum threshold of 75 per cent of acceptance by NBK’s shareholders, who will get 1 KCB share for every 10 NBK shares. KCB recommended an interim dividend of 1.00 shillings per share.
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Kenya Commercial Bank Joshua Oigara