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Kenya's largest indigenous bank, Kenya Commercial Bank (KCB), has posted a higher half-year profit, mainly buoyed by its expansion into southern Sudan and Tanzania and increasing saving rations by Kenyans.

The KCB Group Deputy Chief Executive, Martin Oduor-Otieno, said on Wednesday the bank's pretax profits rose to 1.5 billion shillings (about 21 million U.S. dollars), a 63 percent increase over the same period in 2005.

"I believe the impressive performance is sustainable into the future. We are on course to meet our 2006 financial targets and have put in place initiatives to ensure we perform even better in years to come," Oduor-Otieno briefed investors in Nairobi.

"Our subsidiary in southern Sudan, which we launched in May 2006, is settling down well, while the KCB Tanzania have continued to post improving results in the period to June," he added.

Oduor-Otieno said the bank's total operating income increased by 24 percent to stand at 5.6 billion shillings while total operating expenses were 15 percent higher compared to the first half of 2005.

"The growth of income reflects higher earnings on our good book, returns on the increasing level of customer deposits, as well as better margins and higher level of customer transactions during the six month period," said Oduor-Otieno.

He attributed the increase in operating costs mainly to investment in information technology and network, which he said, was critical if the bank is to continue to deliver the products and quality service.

"This is an impressive and encouraging performance, which shows sustained momentum in the growth of the business," he added.

Oduor-Otieno said the bank plans to spread its wings to the neighboring country Uganda in 2006/07 and Rwanda in 2007/08.

The east African nation's largest retail bank opened its first branch in Juba, the capital of southern Sudan in May this year, making history as the first international bank to set a branch in the vast region.

It also opened another subsidiary in June in Rumbek, which serves as the headquarters of the United Nations and various aid agencies working in southern Sudan.

The Kenyan bank is now one of the only two banks operating in the region. The other is Nile Commercial.