Commercial Bank of Africa (CBA) released their full year 2016 results yesterday in which the bank realized an 87% increase in profits from Ksh. 3.5 Billion in 2015 to Ksh. 6.7 Billion. This makes it the bank with highest percentage rise in profits during a period when other bank’s profits declined.
The total operating income rose to Ksh. 19.9 Billion up from Ksh. 14.6 Billion in 2015. This was driven by a 39% increase in the fees and commissions on loans and advances to Ksh. 5.7 Billion most probably from their M-shwari product which was not affected by the rate cap. Income from forex trading also grew by a massive 133% to Ksh. 2.2 Billion.
Their total operating expense rose by 29.8% to Ksh. 12.4 Billion. This was mostly as a result of a rise in the loan loss provision by 103% to Ksh. 4.1 Billion due to an increase in the gross non-performing loans from Ksh. 4.7 Billion in 2015 to Ksh. 7.4 Billion. This is a clear indication of the hostile operating environment in 2016 due among other things the rate cap.
Customer deposits stood at Ksh. 159 Billion up from Ksh. 148 Billion in 2015. I suspect that Mshwari had a role to play in the rise in deposits as customers endeavored to save so as to be able to access loans. This gave the bank a liquidity ratio of 45.10% as opposed to 36.73% the previous year which is adequate to enable the bank weather the turbulent times.
Earnings per share rose to Ksh. 22.91 up from Ksh. 17.38 the previous year.