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KCB, which also operates in Uganda, Tanzania, Rwanda, Burundi and South Sudan, expects regulatory approval to buy more than Sh25 billion ($248.76 million) worth of assets from Imperial Bank, which collapsed in 2015. The price of the assets has not been disclosed.
This purchase will help KCB to strengthen its small and medium enterprises banking business, since Imperial had many such customers, Oigara said.
Oigara, who joined KCB in 2013 after a stint as finance chief at Bamburi Cement, said the group’s return on equity, a measure of profitability, was set to climb towards 24 percent after dropping to 20 percent from 25-27 percent in the wake of the rate cap.
He said the recovery was mainly due to deals done via mobile lending services like KCB M-Pesa, a partnership with Safaricom, which owns the M-Pesa platform.
The boom in mobile phone lending has also been driven by demand from small traders locked out of normal bank loans by the rate cap, Oigara said.
“We expect our non-funded (fee) income to reach 40 percent (of total) by 2020. Today it is around 33 percent,” he said.
The bank lends out 300 million shillings daily on the KCB M-Pesa platform, about half of the 600-700 million shillings lent out by all banks daily on such platforms. Mobile phone loans are usually for 30 days.
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