ZIMBABWE – HARARE – KINGDOM Financial Holdings Limited (KFHL) defied a tough competitive period to report an increase in profit after tax for the six months to June 30 2011 to US$2,3 million up from US$1,5 million in the comparative period last year.

The group’s strong performance comes on the back of reports that its banking arm, Kingdom Bank Limited, has secured a joint venture partner as it seeks to meet the prescribed minimum capital requirements set by the Reserve Bank.

Group chief executive Mrs Lynn Mukonoweshuro said the group was finalising plans to recapitalise its operations, which will further strengthen the capital base, in particular of the key subsidiary Kingdom Bank, enabling it to comply with the minimum regulatory requirements.

“The recapitalisation has reached an advanced stage and we will be releasing details of how KFHL intends to raise additional capital so that its operating units are fully funded to be able to take advantage of business opportunities in Zimbabwe and the region,” said Mrs Mukonoweshuro.

She said the Zimbabwean operations contributed about 71 percent to the group’s profit before income tax. She said KFHL had experienced an improvement in the performance of its other operating units, which also recorded positive profit after tax.

Mrs Mukonoweshuro said Kingdom Bank Limited (KBL) had a robust performance in the period under review despite stiff competition and an illiquid market.

The bank had also continued to diversify its product range, while new innovative product offerings such as Kingdom CellCard and the Cardless ATM withdrawal solution were launched.

The micro-lending unit, MicroKing Credit and Savings Company, achieved a return on equity of 99 percent, the highest ever recorded for the group in the first six months of the year and also in comparison to the same period in the prior year. Mrs Mukonoweshuro expected this momentum to be maintained during the remainder of the financial year.

She attributed the success of the micro-finance unit to the growth in market share as well as the continued support it is receiving from international micro-funders which helped to boost its lending book.

Mrs Mukonoweshuro said she was pleased that Kingdom Asset Management (KAM) had managed to reverse its loss made in the first six months of last year as market confidence returned, a trend she expected to continue into the second half of the year.

Kingdom Stockbrokers (KSB) as well as the group’s associates comprising mainly the Malawi operations also contributed to the group’s profit.

“We are pleased that the group managed to register growth in profits at a time when the market has become increasingly competitive,” Mrs Mukonoweshuro said.

“Particularly pleasing was our success in servicing and meeting the financial needs of our bank customers. We also launched new innovative product offerings which have been well received by our customers,” she said.

She also commended efforts by the Government to revitalise economic growth, saying this was vital for the recovery and growth of key sectors such as manufacturing, which were critical to employment creation.

“We remain ready to play our part, as we have been doing even under challenging conditions, to support national initiatives to grow the economy,” said Mrs Mukonoweshuro.