K-Rep bank in Sh209m loss

Shareholders at K-Rep Bank have injected additional Sh1 billion to shore up the bank’s capital against the backdrop of loss in profits for the year upto September 30, 2008.

The banks’s chief executive officer Kimanthi Mutua said the additional capital would be used to diversify and roll out new products to grow the bank’s market share and develop ICT infrastructure.

The bank, according to unaudited financial report registered loss in its pre-tax profits of Sh209 million compared to a profit of Sh146 million upto September 2007.

Mr Mutua attributed the loss to post-election violence that destroyed many small businesses, which form the bulk of their lending category.

He said massive investment in the bank’s ICT infrastructure had also sliced the profits.

The financial results go against the trend in the banking sector where banks have registered significant improvement in their profits for the year.

The shareholders who contributed the new capital are International Finance Corporation, African Development Bank, Shorecap International, Stichting Triodos Deon, FMO, K-Rep GFroup Centum Investments and several individuals.

Mr Mutua said the bank will continue investing in Temenos 24, which will offer the bank a platform to roll out innovative products like internet banking, mobile banking, POS devices.

Since its inception as a micro-finance institution, K-Rep Bank has registered mixed results, with its profit trends being mostly inconsistent.

Mr Mutua said the bank expected to make a quick turnaround after the businesses they are supporting stand up again.

He said the potential in the micro-finance sector in the country was immense and the bank would continue to focus on lending to the sector.

“The growth potential in micro-finance sector is big considering that still only a small percentage of bankable population has access to suitable financial services.” he said.