KCB Group - Enterprise Africa October 2023

KCB Promises Better for People

KCB Promises Better for People

PRODUCTION: James Davey

‘For People, For Better’ is the new motto for leading East African financial services business KCB Group. By bringing all stakeholders closer together through a new purpose, the company is already achieving strong results as it looks to become the preferred financial solutions provider, achieving results for all shareholders.

INDUSTRY FOCUS: FINANCE

//Kenya has long strived for a repositioning of its economy, becoming more diversified and more open to fresh opportunities to participate at continental and global level. Its financial services sector is a perfect example of success. Growing from a primary resource based economy, characterised by agriculture, forestry, fishing, mining, and others, the economy now boasts important secondary and tertiary industries based around tourism, manufacturing, and financial services. This financial services ecosystem has gained world-famous status thanks to innovative, localised solutions such as M-PESA and other mobile money transfer systems. But the economy was rocked by the Covid-19 pandemic and dropped from previously growing

at an average of 5.9% year-on-year between 2010 and 2018 to achieving just 4.8% GDP growth in 2022. While many expect the East African nation to return to pre-Covid growth levels over time, the economy is now reliant on strength of world markets in Europe, North America, and the Far East. As planned, Kenya is an important African player on the global stage, but continuing innovation and progress is the next major challenge. At the heart of the financial

services space in Kenya and East Africa is KCB Group. A leading commercial bank with savings, loans, insurance, investments, debit and credit cards, and more. Headquartered in Nairobi, the company is one of the largest commercial banks in the country and has been awarded for customer service, innovation, and responsibility in the past two years. Subsidiaries cover much of East Africa with KCB Banks across Kenya, Burundi, Rwanda, South

// WE HAVE WITNESSED NOTABLE IMPROVEMENT IN ECONOMIC ACTIVITIES OVER THE PAST TWO YEARS POST THE PANDEMIC, ALTHOUGH MACROECONOMIC UNCERTAINTIES PERSIST //

Sudan, Tanzania, Congo, and Uganda. The company’s employee count is above 11,000 and profits were around KShs 16.1 billion at the end of the first half of 2023.

BRAND PURPOSE

Driving the boom of formal financial services and fintech in the region, KCB has become increasingly important from a job creation and CSR perspective. With roots going back more than 125 years, the Kenya Commercial Bank that is recognised today was officially branded in 1970 when the mantra of ‘being closer to the people’ is adopted. That ideology has never been forgotten and today the company has more than 200 branches and more than 380 ATMs all over Kenya, and more than 60

branches across other nations.

This network has allowed for KCB to build a customer base of 32 million people. nurturing and building ion this success, and assisting in the ongoing diversification of the economy in East Africa, KCB adopted a new Brand Purpose – ‘For People, For Better’. This philosophy, adopted in 2022, involves a new set of values that surround the need to be connected, courageous, and closer. Group CEO Paul Russo embraced the fresh purpose and said it would have an impact on the growth of businesses across the region.

“Through this purpose, we seek to position our brand as the region’s undisputed financial services leader which puts people and their diverse needs first, to make life better for the millions of customers we serve,” he said.

“To achieve this, we will be guided by our values of being closer, connected, and courageous anchored on the pillars of customer obsession, productive culture, and sharper execution.”

The talent war underway in Kenya is also addressed by the new ideology as KCB looks to position itself ahead of others, attracting and retaining top people.

KCB employees quickly bought into the purpose and the company moves forward as one, focussed on achievement of positivity in challenging conditions.

“We entered 2023 with positive momentum and we shall build on this and ensure that we make significant step change in culture and performance, across all our business units,” Russo added.

INDUSTRY FOCUS: FINANCE

“Our unwavering commitment to customer centricity will continue to drive our vision and strategy. Our focus to deliver on our strategy in 2023 will be underpinned by execution of embedding of customer obsession, new to bank customer acquisition, cross selling of products, being digital to the core, enhancing operational efficiency, prudent asset quality management, and delivering

a tangible culture transformation.”

Taking his role in May 2022, Russo has worked through numerous roles within KCB and understands the importance of the business to the wider East African economy.

“We have witnessed notable improvement in economic activities over the past two years post the pandemic, although macroeconomic uncertainties persist,” he said. “Across

the East Africa region, the rally in economic growth which started in 2021 continued throughout 2022 albeit at a slower pace. This expansion was underpinned by heightened business activities and a rebound in key sectors. Our role as KCB was to support the recovery of personal customers and businesses across the region to enable them to bounce back stronger. On this front, we were able to achieve success.”

STRONG RESULTS

In August, the company’s half yearly results for 2023 were positive and showed strength through conviction as the new brand purpose combined with ambition and historic success came together to demonstrate what is possible.

54% growth in total assets to KShs 1.86 trillion helped to fuel net profit

// THROUGH THIS PURPOSE, WE SEEK TO POSITION OUR BRAND AS THE REGION’S UNDISPUTED FINANCIAL SERVICES LEADER WHICH PUTS PEOPLE AND THEIR DIVERSE NEEDS FIRST, TO MAKE LIFE BETTER FOR THE MILLIONS OF CUSTOMERS WE SERVE //

figures of KShs 16.1 billion. Revenue also grew by 22.2% to KShs73.1 billion. Russo was delighted, saying: “Despite a challenging economic environment across our operating markets, the business remained resilient delivering a strong balance sheet and increased contribution from regional businesses. Profitability was under pressure in the first half from increased funding costs on higher market deposits rates, prudent provisioning on legacy credit facilities, and provisions for legacy legal claims at NBK.

“Looking ahead,” he added, “noting the actions we have taken and with significantly improved liquidity, business focus is on accelerated performance in the second half of the year while supporting the distressed customers.”

Group Chairman Joseph Kinyua

also focussed on the potential for future growth, saying: “The Group is well-positioned for future growth, riding on its solid governance structures and digital capabilities, strong regional presence and committed staff to support customers and other stakeholders. We are deliberate in making a meaningful transformation for communities and making a greater contribution towards economic progress across markets.”

One area of particular strength was highlighted in September when KCB was labelled Best Bank in Auto Finance for 2023 at the Automotive Industry 100 Awards (AIA). Financing of cars, trucks, buses, and related equipment is a core focus with KCB’s Asset Finance and Insurance business. Because of such strength in these areas, KCB remains one of Kenya’s most

resilient financial service providers. Now representing around 7.5% of GDP in Kenya, and growing in other countries, banking and financial services is woven into the economy like never before, and this is good thing for the transformation of the region. With KCB driving change, and always pushing for quality across all metrics, the industry has a fierce and passionate stalwart that will ensure progress. The new Brand Purpose will push KCB into a new era with strength and Paul Russo is excited.

“The KCB lion will continue to roar, and the roar will be loud and undisputed, For People. For Better,” he said.

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