Kenya Commercial Bank to Raise Money for Expansion, Projects

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Kenya Commercial Bank Ltd., the country’s largest lender by market value, will raise capital over the next three years to expand in the region, Chief Executive Officer Joshua Oigara said.

The bank, based in Nairobi, will come to market as part of its plan to increase core capital to 140 billion shillings ($1.4 billion), Oigara said in an interview Thursday in the city. The company has set aside $250 million to start operations in new countries including the Democratic Republic of Congo, Mozambique and Ethiopia, he said.

“We are increasing core capital because we want to take on bigger projects,” Oigara said. “We are looking to expand into one country this year.”

KCB, as it’s known, earlier reported a 13 percent increase in first-half profit to 9.24 billion shillings, as earnings from loans grew by a similar margin to 19.4 billion shillings.

“Overall balance-sheet growth was above our expectations,” said Francis Mwangi, head of research at Nairobi-based Standard Investment Bank Ltd. “Profit after tax was within our expectations and we retain our full-year estimate of 21 billion shillings.”

KCB is aiming for annual profit growth of 15 percent and “we are on target to achieve this,” Oigara said. The lender plans to narrow the ratio of non-performing loans to 6 percent by December from 7.3 percent at the end of June, he said.

“More customers are coming to the group, we are seeing huge expansion of loans and we already have loans today in excess of 80 billion shillings approved and not disbursed yet,” he said.

KCB wants to finance projects that include petroleum ventures in Kenya, Uganda and Rwanda in East Africa, which has become a hotbed of oil and gas exploration and discoveries, he said.

The bank’s shares fell 1.9 percent to 50.50 shillings by the close of trading in Nairobi, bringing losses this year to 11 percent.

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