Kingdom defies tough times

of more than US$5 million for the year ending December 31, 2010.
This reversed a loss of US$1,1 million recorded in the previous period.
The group’s performance continued to be underpinned by the contribution of its Zimbabwean operations, which contributed 85 percent of total profit before tax.
Net interest margin came in at 53 percent compared with 88 percent the previous year, largely due to an increase in the use of more wholesale funds which are costly to fund the lending book.
But the interest expense as a proportion of interest income worsened from 12 to 47 percent.
Dealing profit, at US$3,5 million, was four percent below the previous year and contributed 10 percent of total income compared with 21 percent the prior before..
The dealing profits were driven by foreign currency trading on the foreign exchange market.
Fees and commission income contributed 62 percent of the group’s total income.
Transactions through the commercial bank rose both in value and volume during the year.
The group’s flagship, Kingdom Bank’s market share remained at about five percent.
KFHL’s other subsidiaries contributed about US$1,3 million to the group’s profit after tax.
MicroKing Credit and Savings Company Ltd continued to struggle for funding to underwrite more meaningful business.
KFHL’s performance, on the back of improved contribution from its Zimbabwean operations, has laid the groundwork for the diversified financial services group to strengthen its capital base as well as expansion, following the successful de-merger process from Meikles Limited.
Chairperson Ms Sibusisiwe Bango said the impressive results were achieved against the background of a challenging period in the group’s history and difficult operating environment.
“The group endured undue negative publicity due to the shareholder issues which have now been successfully resolved, giving the board and management the opportunity to focus on building shareholder value going forward,” she said.
She said the results were a testimony to the resilience of the group’s operating subsidiaries, and the various strategies that were implemented by management to sustain the group’s operations during the year under review.
Ms Bango said the demerger of KFHL from Meikles Limited had been approved and implementation of the demerger would be finalised through the issue of a dividend is specie of two KFHL shares for every one Meikles share held.
Following the demerger, she said the group’s capitalisation efforts were underway to ensure injection of new capital by shareholders before the end of the fourth quarter of 2011.