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Integrated
report

AND FINANCIAL STATEMENTS 2017

Who We Are

KCB AT A GLANCE

  • 263 Branches, 962 ATMs, 15,000 Agents Channels

  • 6,483
    employees

  • NSE, DSE, USE, RSE
    Listings

  • KSHS 105,965,873,000
    TOTAL EQUITY

Our Promise
  • Go ahead
Our Values
  • Inspiring
  • Simple
  • Friendly
Our Behaviour
  • I am a leader
  • I find solutions
  • I drive efficiency
  • I simplify work
  • I listen and care
  • I am positive and committed

2015

64%

NON-BRANCH TRANSACTIONS

36%

BRANCH TRANSACTIONS

2016

77%

NON-BRANCH TRANSACTIONS

23%

BRANCH TRANSACTIONS

2017

87%

NON-BRANCH TRANSACTIONS

13%

BRANCH TRANSACTIONS

OUR VALUE CREATION PROCESS

Financial capital

The funding for the Group comes from investors, institutional lenders and deposits from our clients. The funds are used to run the activities of the Group and generate returns for shareholders.

  • Shareholders’ Funds Kshs.106 billion
  • Borrowings – Kshs.15 billion
  • Customer Deposits – Kshs.500 billion

Human capital

Our human capital - people, management and leadership – are key to the growth of the business and increasing shareholder returns.

  • Staff Head Count: 6,483
  • Permanent employees: 5,393
  • Short term employees: 1,090
  • Male: 57% Female: 43%

Intellectual capital

Our intellectual assets, such as brand value, innovative products, innovation capacity and reputation also plays a key role in growing the business. Strong brand affinity and exceptional innovation capacity keeps us ahead of the curve.

Social and Relationship capital

These are key assets as it relates to relationships with our stakeholders (Customers, country governments, regulators, employees, investors, other financial institutions and media).

Manufactured capital

Our business structure and operational processes that provide the structure and mechanisms through which we run the bank including information technology software, systems and structures.

Natural Capital

This relates to our impact, directly and indirectly on the environment.

  • We have developed a social and environment
  • Targeting reduction of carbon footprint by 5% annually
  • Adopted 8 SDGs

OUR STAKEHOLDERS

We are committed to working with all of our stakeholders – understanding their expectations and interests, creating opportunities for making our business better.

Investors

  • - Shareholders
  • - Fund Managers
  • - Analysts

Employees

  • - Long-term employees
  • - Short-term employees
  • - Executives

Regulators, key players & government

  • - National Treasury
  • - Central Banks
  • - Capital Market Regulators
  • - Securities Exchange
  • - Bankers Associations

Customers

  • - Retail
  • - Corporate
  • - Asset Manager
  • - Intermediaries

Communities

  • - Beneficiaries
  • - Corporate Social Investment
  • - Partners
  • - Media
  • - Advocacy Groups

To grow the business, we must continue investing in infrastructure that support operational excellence, giving our customers platforms that make their lives easier while protecting the assets they hold dear.”

GROUP CHAIRMAN’S

STATEMENT

An overview

In 2017, the regional banking sector was beset by various challenges – some localized and others regional – which impacted on the overall operating environment and the Group’s performance.

Kenya for instance, marked the first full year of the implementation of the capping of interest rates which saw reduced appetite for lending to the small and medium sector even on the back of an improvement in corporate and retail lending. There were also the added challenges of a prolonged election period in the country which depressed lending operations in this key market which was not helped by the severe drought that prevailed in most parts of the country.

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As a business, we do not exist solely to make money; we have to also take care of the communities in which we operate in by lending a helping hand where we can.”

Q&A

INTERVIEW WITH

GROUP CEO & MD

How was the year 2017 like?

Although it was not entirely unanticipated, the year 2017 proved a challenging one for the Group on the back of various setbacks at the macro level, among them the impact of the interest rate cap, widespread drought, rising political temperatures in our key markets, slow-down in credit uptake and generally lethargic economic growth.

The prolonged electioneering period in Kenya acted as a damper to the economy and triggered the onset of a slowdown in business performance as clearly evidenced by a number of profit warnings by publicly listed companies.

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The Group’s net interest income was up marginally from Kshs. 62.8 billion in the FY 2016 to Kshs. 63.7 billion in in 2017.”

REPORT FROM REPORT FROM THE

CHIEF FINANCIAL OFFICER

Key highlights 2017

The year 2017 will be remembered for its significant political and economic events across most of the markets that we operate in. We experienced a stormy operating environment that was defined by the pitched drumbeats of elections in Kenya and Rwanda as well as macro-economic concerns in South Sudan, Burundi and Rwanda.

Despite this, it is the region’s demonstrated resilience in the face of bleak economic predictions from market observers that set the tone for the 2017 performance.

For KCB Group, the deliberate decision to maintain a controlled lending appetite in Kenya – the Group’s largest market - despite an industry decline in private sector credit paid off.

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GROUP BOARD OF
DIRECTORS
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Ngeny Biwott

KCB Group Chairman

Adil Khawaja

Director

Tom Ipomai

Director

John Nyerere

Director

Dr. Nancy Asiko Onyango

Director

Julius Mutua

Director (Alternate to Henry Rotich)

Georgina Malombe

Director

Joshua Oigara

Group CEO & MD

Lawrence Kimathi

Group Chief Financial Officer

Joseph Kania

Group Company Secretary

EXECUTIVE COMMITTEE
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Joshua Oigara

Group CEO & MD

Lawrence Kimathi

Group Chief Financial Officer

Apollo Ongara

Director Credit

John Mukulu

Group Chief Risk Officer

Samuel Makome

Group Chief Operating Officer

Paul Russo

Group Human Resource Director

Judith Sidi Odhiambo

Group Head of Corporate and Regulatory Affairs

Jane Mwangi

Executive Director
KCB Foundation

Joseph Kania

Group Company Secretary