KCB 1ST QUARTER 2011 ANALYSIS

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Kenya Commercial Bank (from now “KCB”) has released its results for the First Quarter 2011 period.

Profit before Tax grew by 31.6% to Kshs.2.51 billion. Profit After Tax increased from Kshs1.332 billion in 2010 to Kshs1.774 billion in 2011, a growth of 33.3%.

Total Assets grew by 22.78 percent to 271 billion.

Loans and advances grew by 23% to 155 billion as a result of an increase of customer deposits to 209 billion, which is a 12.9% rise over the previous year.

Interest from loans advances was up 14.5% to 4.65 billion.

Net Interest income was up 32% to Kshs.5.111 billion from Kshs.3.873 billion recorded in 2010.

KCB earned 1.028 billion from other fees and commissions, while Forex trading brought in 745 million, a rise of 69% from previous years.

Net non-performing loans went down by 14.44 percent to 5.7 billion. This was however negated by staff costs which went up by 22.6 percent to 2.57 billion. This has been KCB’s Achilles heel over the years.

KCB had a rights issue mid last year which raised 12.5 billion out of a targeted 15 billion.

Investors who took part in the issue, which was priced at 17/= are currently up 53% in about 9 months.  KCB was expected to distribute some of the money to its struggling subsidiaries to give them a boost. Their fully owned mortgaging subsidiary, S&L, was also to get a good chunk of the proceeds of the rights in order to boost their lending capacity in a Real Estate market that shows no signs of losing steam.

This set of results indicates that KCB’s subsidiaries have already broken even and have started to contribute towards the bottom line.

Things started to look up for KCB from Q4 2010, where the bank had a great performance enabling it to post an unprecedented 75.8% increase in PAT for the Full Year 2010 surprisingly edging Equity.

KCB’s announcement comes hot on the heels of The Co-operative Bank of Kenya’s announcement of a 57.7% increase in Profit After Tax from 1.04 billion to 1.64 billion. See Analysing The Co-operative Bank Of Kenya 1st Quarter 2011 Results