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Ceo’s StatementDr. James Mwangi, MBSChief Executive Officer & Managing Director(Afisa Mkuu na Mkurugenzi Mtendaji)102007 Annual Report and Financial Statements
Ceo’s Statement“ … the annual cumulative pre-tax profit for the year 2007 grew by 116% toKshs2.38 billion compared to Kshs1.10 billion reported in 2006. The growth inprofitability is attributed to a 73 % increase in total operating income to Kshs 5.82billion compared to Kshs3.37 billion realized in 2006.…”Iam delighted and privileged to present toyou the bank’s report for year 2007. Theimpressive performance recorded duringthe year scaled the bank to new heightsleading to local and international recognition.The business grew in in all spheres translatinginto better prospects for all stakeholders.FocusThe bank remained focused and aligned to itsvision of being the preferred financial servicesprovider contributing to the economicprosperity of Africa. Greater emphasis onfocused customer service was taken to ahigher level in pursuit of our mission ofmobilising resources and offering credit to ourcustomers.Financial ReviewThe bank’s unmatched growth trajectory inthe banking industry is attributable to yoursupport and the unique business model whichfocuses on high volumes and low marginswhile simplifying and demystifying financialintermediation. I am pleased to note thatthe annual cumulative pre-tax profit for theyear 2007 grew by 116% to Kshs 2.38 billioncompared to Kshs 1.10 billion reported in2006. The growth in profitability is attributedto a 73 % increase in total operating income toKshs 5.82 billion compared to Kshs 3.37 billionrealized in 2006. The cost to income ratio hasreduced significantly to 59.4% from 67% as aresult of significant improvement in operatingefficiency.In the year under review, our total assetsexpressed through the bank’s total balancesheet grew by 166% to close at Kshs 53.22billion from Kshs 20.02 billion as at December2006. The growth in assets was supported byincrease in funding via a core capital injectionof Kshs11billion and additional long-termsubordinated debt of Kshs 4 billion.Our deposit base rose by 93% to 31.53 billionfrom Kshs 16.33 billion in 2006. The growthin deposits was driven by an 81% increase innumber of customers’ accounts to stand at1.8 million from 1.0 million accounts as at thebeginning of the year. The branches openedduring the year contributed 14% of these newaccounts.To facilitate economic activities by ourcustomers, the bank increased its lendingto Kshs 21.84 billion from Kshs 10.93 billionin the previous year. This growth in the loanbook was evidenced by the number of loanaccounts that grew to 392,822 from 252,147.I am happy to report that the bank achieved areduction in the ratio of gross non-performingloans and advances from 6.95% to 5.39%.During the year under review, total shareholdersfunds have increased considerably to Ksh 15billion from Ksh 2.2 billion. This phenomenalgrowth was replicated at the Nairobi StockExchange with our market capitalizationrising to approximately Kshs 54 billion fromKshs 12.6 billion. I would like to congratulatethe shareholders for their wise decision ofapproving 24.99% shareholding investmentby Helios EB for an additional Kshs 11 billioncapitalization.The Bank’s phenomenal growth andperformance has been recognized both locallyand internationally. The accolades accordedthe bank include, conferment of the GlobalVision award at the June 2007 Vision Summit,voted the Best Bank in Kenya by EuromoneyAwards for Excellence in July 2007 andscooped 6 awards at the 2007 Kenya AnnualBank Awards in November.Operations ReviewThe bank’s expansion program in terms ofadditional branches, ATMs and Point of Saleterminals, the growth in customer base andgrowth in our loan book have all contributedto the impressive performance. To enable easyand affordable access to financial services bymore Kenyans, the bank has been carryingout a strategic planned expansion program.In 2007, the bank opened 29 new branches,installed an additional 150 ATMs to bring thetotal to 350 ATMs and recruited an additional1,029 staff to ensure effective servicedelivery. These heavy investments have beenundertaken without slowing down the bankreturns.In addition to new branches and ATMs, thebank entered into a partnership with leadingretail stores such as Nakumatt, Tuskys andUchumi rolling out 660 Points of Sale (POS)terminals. This has enabled the Bank to2007 Annual Report and Financial Statements 11
Page 3: Notice of Annual General MeetingNot
Page 6: Chairman’s Statement continued“
Page 9: Taarifa ya Mwenyekiti inaendeleaZai
Page 13 and 14: Taarifa ya Afisa Mkuu na Mkurugenzi
Page 16 and 17: Financial HighlightsGROWTH IN GROSS
Page 18 and 19: Key AchievementsAugust 2007 - Our u
Page 21 and 22: Statement on Corporate Social Respo
Page 23 and 24: Board of DirectorscontinuedPeter Ga
Page 25 and 26: Senior ManagementPeter Makau, Direc
Page 27 and 28: Ripoti ya WakurugenziKwa mwaka ulio
Page 30 and 31: Statement of Directors Responsibili
Page 33 and 34: Balance SheetAs at 31st December 20
Page 35 and 36: Statement of Changes in EquityFor t
Page 37 and 38: Notes to the Financial StatementsFo
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Page 58: Notes to the Financial StatementsFo
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Notes to the Financial StatementsFo
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Countrywide Branch NetworkHEAD OFFI
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Notes / Maelezo2007 Annual Report a
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Proxy FormThe Company SecretaryEqui
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