Regional lender KCB posted an 18 per cent rise in its 2014 pre-tax profit, from double-digit growth in its balance sheet and non-funded income, with all its subsidiaries returning positive earnings.  KCB profits after tax rose to $180.7 million last year, up from $153.8 million in 2013.

KCB Group Chief Executive Officer Joshua Oigara said the growth was buoyed by a relatively favourable macroeconomic environment in East Africa.

“During the period, the region benefited from improved macroeconomic indicators with most economies posting better growth figures, reduced inflation, lower lending rates and higher remittances,” said Mr Oigara.

He said all the subsidiaries are now profitable, after Uganda turned around from a loss-making position. South Sudan also shrugged off uncertainties over the country’s future because of the ongoing civil war, to post profits.

The KCB share price closed trading at the Nairobi Securities Exchange (NSE) at $0.64, dropping 0.84 per cent from the previous day’s price.

At the Uganda Securities Exchange (USE), the bank’s share price edged up 1.51 per cent to close at $0.64, and at the Dar es Salam Securities Exchange (DSE), it price remained static at $0.62.

In an investor note, Dyer and Blair said that it expected further growth in KCB’s loan book in 2015, driven by increased appetite for credit. The investment bank said personal and agricultural loans would be the key drivers of this growth

“We expect accelerated growth in non-interest income, driven by increased use and efficiencies in the bank’s alternative channels such as agency banking, mobile banking and bancassurance,” Dyer and Blair said.

KCB had a 23 per cent growth in deposits; customer numbers grew from 2.5 million in 2013 to 4.1 million in 2014. The banks’ loan book grew by 25 per cent, supported by a steady credit appetite, and non-performing loans dropped from 8.1 per cent in 2013 to 6.3 per cent last year.

Last year, there was a drop in KCB’s loan book in the real estate, manufacturing, mining, tourism, financial services and energy sectors.

The bank’s total revenue contribution from Kenya rose to 81.2 per cent, up from last year at 80 per cent. In Tanzania, the total revenue contribution rose by 0.5 percentage points to 3.5 per cent.

In South Sudan and Rwanda, there was a decline in revenue contribution. South Sudan dropped to 8.6 per cent from last year’s 10 per cent, and Rwanda by 0.1 percentage points to 2.9 per cent. Burundi’s revenue contribution increased by 0.4 percentage points to 1 per cent, while Uganda rose to 3.2 per cent from last year’s 3 per cent.

The bank recorded a rise in net interest income to $386.7 million in 2014, up from $354.8 million the previous year.

Mr Oigara said the bank is planning to boost its investment in new business lines this year, driving growth in its subsidiaries and expanding its forays into the cashlite economy, which is billed as the next frontier for growth in the financial services sector.

“We are working on scaling up our investment in KCB Capital and Bancassurance, improving efficiencies and consolidation, as well as focusing more on growing the business in Uganda, Tanzania, Rwanda, Burundi and South Sudan,” Mr Oigara said.

Mid last year, Uganda and South Sudan subsidiaries recorded a dip in their profits. Uganda attributed the dip to non-performing loans. In South Sudan, the political tension saw KCB close several of its branches in Marakal, Bentiu and Upper Nile State. The bank opened two new branches in Juba in October and November last year.

By September 2014, KCB Uganda returned a gross loss of $981,677, while the South Sudan subsidiary posted a profit of $12.2 million, down from the $14.6 million it had posted in the nine months to September 2013.

As at September 2014, the profit attributable to the Tanzania subsidiary grew to $1.6 million from $218,767 in September 2013, while Burundi’s share of the group’s profits grew to $195,447 from $16,657 in September 2014.

Rwanda’s profit rose to $11.7 million over the same period. CfC Stanbic Bank, with interests across the region, saw an 11 per cent increase in its profit-after-tax for 2014, to $61.2 million.

Mike Blades, CfC Stanbic’s executive for corporate and investment banking in East Africa, said the growth was mainly attributable to the improved performance of the Kenyan banking business and the stock brokerage business, partly offset by a decline in revenues in the South Sudan branch operations.

“Our focus on delivering value to our customers helped strengthen our underlying business and our results. Our growth was high-quality, propelled by key businesses that we have been emphasising in recent years,” Mr Blades said.

The bank’s interest income increased year on year by 12 per cent as a result of a 28 per cent growth in customer loans and advances. The increase of 15 per cent in net fees and commission income was due to increased transactional volumes from a growing customer base.