KCB Group has revealed that it has been guaranteeing fuel purchases under the G-to-G government oil deals program.
According to the disclosures which showed the bank’s financial might, KCB Group has cumulatively guaranteed fuel import purchases worth $3.4B (Sh.514.96 billion) since the start of the G-to-2G deal.
This is equivalent to 85 per cent of all the letters of credit that have been issued under the deal.
According to KCB, the three main oil companies involved in the deal have been customers with the lender. These companies include Galana Energies, Gulf Energy, and Oryx Energies.
They are reported to be distributing fuel on behalf of three oil companies owned by Saudi Aramco, Abu Dhabi Oil Company, and Emirates National Oil Company.
“We bank all the participating Oil Marketing Companies and finance them under a collateral management structure utilizing the imported products as security,” said KCB Group chief executive officer Paul Russo.
“We are agile and willing to support the economy by working with different stakeholders.”
The disclosure by KCB indicates that since the start of the oil deal in April 2023, all the banks taking part in guaranteeing oil marketing companies have guaranteed at least Sh. 605.1 billion.
Apart from KCB, the other participating banks include the NCBA Bank Group, Absa Bank Kenya, the Co-operative Bank, Stanbic Bank, the Afrexibank (also known as the Africa Export-Import Bank).
KCB made the disclosure on November 23 when it released its financial results for the third quarter of 2023 ended September 30. The results showed that the bank recorded a net profit of Sh. 30.7 billion which was a marginal improvement from the Sh. 30.6 billion the bank recorded in the same period the previous year.
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According to a report that appeared in a loca daily, KCB Group also issued the Sh. 24 billion letter of credit to the Kenya National Trading Corporation (KNTC) for the importation of household goods under a program in the Ministry if Trade. The importation was reported to have been aimed at lowering cost of basic goods including cooking oil.