Annual REPORT

CHAIRMAN’S STATEMENT
REVIEW OF THE MACROECONOMIC ENVIRONMENT
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
Dear Shareholders,
I am pleased to present the Annual Report and Financial Statements for
the year ended 31 st December, 2015. The Bank continues to post very
impressive financial performance despite the challenging environment.
The unstinting support by our customers and shareholders clearly
demonstrates the confidence in the Bank. The Board, Management and
Staff have also been instrumental in the great performance of this great
Bank.
Once again, we are happy to have set the pace in the banking industry
by delivering enviable results in the growth among our peers and among
the listed banks. With this remarkable performance our ambition to
become a Tier 1 Bank in the next few years is firmly on course.
Key Financial Performance Highlights
• Profit before Tax increased by 10% from Ksh 2.62 Billion for
the year ended 31 st December 2014 to Ksh 2.88Billion for the
year ended 31 st December 2015.
• Total assets grew by 31% from Ksh 61.8 Billion as at December
2014 to Ksh 81.2Billion as at December 2015.
• Total Shareholders’ funds grew by 12% from Ksh 10.62 Billion
as at December 2014 to Ksh 11.93 Billion as at December
2015.
• Deposits grew by 33% from Ksh 47.2 Billion as at December 2014 to Ksh62.7Billion as at December 2015.
• Loans grew by 47% from Ksh 37.9Billion as at December 2014 to Ksh 55.9Billion as at December 2015.
• The Bank now has over 1.7 Million customers.
Review of the macroeconomic environment
The Year 2015 commenced very well in the Country with the Government leveraging on the astute steps taken earlier to sustainably
grow the Economy. Overall, the country experienced a 5.7% growth in Gross Domestic Product against the projected 6% growth.
This was better than the 5.3% growth realized in 2014. The key drivers of the operating environment were security challenges and
the El Nino rains that wreaked havoc and destruction in some parts of the Country.
From a Sectoral perspective, agriculture, infrastructure, financial services and ICT contributed to the growth, but manufacturing
and tourism declined.
The government also maintained fiscal and monetary discipline, despite increasing pressure from the devolution process and
rising public sector wage bill. Total public debt has increased but remains sustainable, according to Central Bank figures, while
interest rates rose substantially over the period under review .The stock exchange weakened due to increased net foreign investor
outflows, while the Kenya shilling weakened against the US dollar.
With the increased competitiveness of the manufacturing sector which will be a key driver of growth, exports and job creation,
Kenya is emerging as one of Africa’s key growth centers and is also poised to become one of the fastest growing economies in East
Africa. This was further supported by the high spending on infrastructure by the government and globally low oil prices which
boosted the manufacturing and the construction sectors since Kenya is a net oil importer.
Month on month Inflation has remained largely stable during the year and within the CBK target range of 2.5% to 7.5%. The
inflation rate started the year at 5.5%, moved on to 7.1% in April eventually reaching a high of 8.01 % in December 2015.
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