KCB Group plans to expand its business through mobile and branchless banking, its chief executive said on Thursday after reporting an 18 per cent rise in full-year pre-tax profit.

Joshua Oigara, CEO of Kenya's largest bank by assets, said KCB would expand its mobile phone transaction services and agency banking, whereby third-party operators offer basic banking services on its behalf.

"We stopped investing big in branches three years ago. Agents are my new branches and mobile (banking) is the other new way we are connecting with customers," Oigara told reporters.

"The growth in the alternative channels is the big part of our strategy. It is something the industry has committed to."

Oigara said the bank intends to tap international debt markets to fund lending to the real estate sector, reiterating plans first announced in July.

"As a corporate we want to see if we can use the international debt market for a Eurobond. We talked about the medium term, so that's going to be two years," he said.

KCB has borrowed $200 million for lending to sectors export-oriented such as horticulture, Oigara said, adding that it expects the figure to rise by $150 million this year.

The bank, which also operates in Rwanda, Uganda, South Sudan, Tanzania and Burundi, will enter new regional markets this year, the CEO added without giving details. KCB has previously said it aims to expand in the likes of the Democratic Republic of Congo, Somalia and Ethiopia.

READ: Kenyan banks’ EA branches post record profits

KCB's 2014 pre-tax profit rose to Sh23.79 billion ($260.43 million) from Sh20.12 billion the previous year, helped by higher interest income.

Net interest income rose to Sh35.95 billion from Sh32.98 billion, the bank said.

Customer deposits were up 23 per cent at Sh377.27 billion, while net loans and advances climbed 25 per cent to Sh283.73 billion. The proportion of non-performing loans on KCB's books fell to 6.3 per cent from 8.1 per cent in 2013.

KCB will pay a dividend of Sh2, unchanged from the 2013 pay-out. Shares in the bank were flat at Sh59.50 at 0852 GMT.

-Reuters-