A Citibank branch. The bank has reported a net profit of Sh2.86 billion from Sh2.20 billion a year earlier. [Photo: NMG]Multinational lender Citibank has reported a 23.08 percent rise in after-tax profit in the nine months ended September 30.This is largely attributed to increased income from fees and commissions on loans and reduction on staff costs.Net profit rose to Sh2.86 billion from Sh2.20 billion a year earlier, the corporate lender said in a statement on Monday.Earnings from fees and commissions on loans and advances jumped nearly four-fold, rising 373.55 per cent to Sh385.52 million. The profits were also further boosted by a Sh400 million reduction in staff costs in the review period to Sh1.18 billion."Citi’s total operating costs dropped by 13.20 per cent to Sh2.30 billion, helping reduce the impact of a 15.16 per cent drop in net interest earnings to Sh4.03 billion," read the statement.According to Business Daily, the bank, however, registered nearly flat growth in its loan book as the impact of interest rate caps continued to bite.The capping of loan charges at four percentage points above the Central Bank Rate (CBR), presently at 10 per cent, in September 2016, has eaten into interest income of most banks, forcing them to enhance efficiencies to protect profit their margins.Prior to the rate cap law, interest income accounted for about 70 per cent of revenue in the banking industry.The Central Bank of Kenya has maintained that it is a matter of when and not if the rate cap will be lifted, but has warned banks will have to be more disciplined in pricing loans.

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