Development Bank profit down 7 per cent

The Development Bank of Kenya has reported a 7 per cent drop in pretax profit for the first six months to June 2009. It recorded before tax earning of Sh83.7 million against Sh89.7 million posted during a similar period last year.

In an era where commercial banks are scaling down on lending, the bank has, however, almost doubled the amount of money it has given out for the year up to June 30, 2009.

The majority government-owned institution increased its lending from Sh2.7 billion as at June 2008 to Sh4.2 billion by the end of June this year.

Development Bank’s deposits from customers increased from Sh1.9 billion to Sh2.2 billion, showing improvement in areas where other commercial banks are struggling.

DBK was founded in 1963 by the Kenyan Government through the Industrial and Commercial Development Corporation (ICDC), the British Government through Commonwealth Development Corporation (CDC) and the German government through DEG though foreign owners later pulled out .

The government through ICDC now owns 89.3 per cent stake in DBK while investment group, Transcentury Ltd holds the remaining 10.7 per cent.

The bank’s main areas of business have been financing of long-term projects in agriculture, manufacturing, construction, communication and tourism.