KCB Group Expects Restructured Loans to Half in Q2
KCB Group, East Africa’s largest commercial bank, expects the proportion of loans it restructured last year to fall by half in the second quarter of the year.
The bank’s financial results revealed it had restructured a total of kes 106.1 billion, which is 19.6%, of its total loan book for 2020, following the Central bank’s decision to provide relief to customers, such as loan restructuring and payment rescheduling, from mid-March 2020 after the first COVID-19 cases were reported.
However, Group CEO & MD Joshua Oigara told a virtual news conference on Thursday that of this amount, holders of about Kes 30 billion in loans had already resumed regular repayment schedules.
“Some sectors are back on foot and are running. For those ones, there is no moratorium required. They go back to the normal businesses,” Lawrence Kimathi, Chief Financial Officer.
KCB Financial Results
KCB posted a net profit of Kes.19.6 billion for the financial year ended 31st December 2020. However, this was a 22% decline from the Kes 25.2 billion recorded during the same period in 2019. Higher provisions for loan losses and subdued economic activity associated with the COVID-19 pandemic hit business performance.
Joshua Oigara has, however, expressed optimism about the performance of the economy, saying there are signs of a recovery of the economy.
“Signs of recovery were evident at the tail end of the year with increased business activity, and we believe this momentum will carry into 2021,” Joshua Oigara.
The group plans to double its lending to small and medium businesses this year from Kes 50 billion it lent last year, with the government looking forward to setting up a credit guarantee scheme for small and medium-sized businesses hit by the coronavirus, whose capital will eventually rise to at least 100 billion shillings. KCB is among Absa, Co-op, Credit Bank, DTB, NCBA and Stanbic which pre-qualified to participate in the credit scheme.