K-Rep Bank, majority owned by investment firm Centum with a 67.5 per cent, has recorded a 27.5 per cent net profit drop in the year ended December 2015. K-Rep Bank said its net profit in the period stood at Sh372.3 million compared to Sh514 million the year before.
“The profit drop was mainly driven by an increase in … the cost of funds in the last quarter of the year after interest rates went up,” said K-Rep’s chief executive officer Titus Karanja. K-Rep’s customer deposits rose by Sh1.3 billion to Sh13.3 billion, with interest rates having jumped to highs of 27 per cent in the second half of last year.
The bank’s interest expenses overtook its interest income which rose 12.9 per cent to Sh2.7 billion, with non-interest income, including fees, declining 2.2 per cent to Sh645.4 million.
Its loan book expanded by Sh2 billion to Sh12.5 billion. The bank’s operating expenses also jumped 15.1 per cent to Sh1.7 billion, driven by higher loan loss provisions and staff costs among others.
Its provisions for bad debts rose 30.1 per cent to Sh218.2 million, reflecting potential losses on its gross non-performing loans that more than doubled to Sh1.6 billion from Sh776.4 million.
K-Rep is set to rebrand and change its name to Sidian Bank from April 4th.
