Kenya commercial banks have continued to record profits as the economy gets closer to the norm that was, before the pandemic. Old Mutual Holdings Limited is the recent member to the join the list of profitable financial institutions after it posted a Sh200 million profit before tax for the half year ended
June 2023.
The financial institution has accredited the profit to a twelve percent growth in revenue. The firm recorded an increased revenue of Sh1.8 billion in the period. Additionally, the firm also witnessed increased investment income from financial assets and investment properties in the period.
According to Arthur Oginga, Old Mutual Group EA Chief Executive Officer, the success is thanks to the firm’s strategy that focuses on meeting the needs of the customer. “Our strategy is focused on delivering our integrated financial services offering to meet all our customer’s financial needs under one roof. This will enhance our customer experience and improve productivity on our distribution channels in our various
markets,” he said.
The half year profit is a welcomed sight for the firm following a loss before tax of Sh900 million that was recorded in a similar period last year. The financial institution also recorded an increase in finance cost on borrowings, which were up 96% over the same period in 2022 due to increased interest rates and forex losses on the portion of the US dollar-denominated debt. On the other hand, operating profits before finance costs will be Sh2.1 billion in 2023, compared to Sh100 million in 2022.
The libor, on which interest is determined for US dollar loans, also increased from 0.59% in June 2022 to 5% in June 2023, while the Kenya Shilling depreciated by 14% against the US Dollar over the same period.
The group is positive about the region’s economic outlook. However, it notes potential risks from rising global oil prices and the adverse effects of the El Nino weather phenomenon that is already hitting the nation.
