Nairobi - Ecobank Kenya has received a $25 million capital injection from its parent company to help it expand and address the rising cost of financing locally due to high interest rates in the country, the bank's Managing Director said on Wednesday.
The bank, which entered the Kenyan market by acquiring mortgage lender East Africa Building Society (EABS), is a unit of Togo-based Ecobank Transnational, which has operations in 32 African countries.
"We are extremely delighted to receive these funds which will undoubtedly help our bank continue with our expansion, business growth and address challenges associated with rising cost of funds," said Tony Okpanachi, Ecobank's managing director.
The Central Bank of Kenya raised its key lending rate by 11 percentage points to 18 percent in the final quarter of last year to prop up the shilling and fight high inflation, creating worries that the demand for loans would fall and defaults rise.
Ecobank Kenya said its total asset stood at 27.2 billion shillings at Dec 31, while its net profit jumped 62 percent to 202 million, helped by 18 percent growth in its loan book to 11.3 billion shillings.
It has 24 outlets in Kenya, after opening four branches in 2011, and they plan to open between five and ten more this year. (Reporting by Kevin Mwanza; Editing by George Obulutsa and Jon Loades-Carter)