Customers queue inside a KCB branch in Nairobi. /FILE KCB Group has reported a 40.1 per cent drop in net profit for the six months to June, blamed largely on increased provisions in the wake of higher credit risk due to the Covid-19 pandemic.
After tax profit for the period was Sh7.6 billion, a drop compared to Sh12.7 billion same period last year.
“The second quarter was the toughest in our recent history as the pandemic hurt economic activity across markets. Most of the key sectors were nearly shut down and our customers continue to face unprecedented challenges,” Group CEO and MD Joshua Oigara said in a statement on Wednesday.
Oigara said when the virus hit the country in March, the lender made a commitment to look after its customers, staff and other stakeholders while pursuing business continuity.
"We intend to keep on this promise even under the current worsening operating environment,”he said.
To cushion stakeholders against Covid-19 impact, the Group has instituted a raft of interventions such as loan restructuring where for the period under review, , the bank restructured facilities worth Sh101 billion, it notes.
According to the Central Bank of Kenya (CBK), at least Sh844.4 billion of loans in the wider banking sector were restructured by end of June, in line with the emergency measures announced by the apex bank on March 18, to cushion borrowers from adverse effects of Covid-19.
The amount accounts for 29 per cent of banking sector loan book estimated at Sh2.9 trillion.
The amount of restructured loans has more than tripled since April when only seven per cent of the banking sector loan book or Sh176 billion was rescheduled following CBK’s directive. It has also more than doubled compared to May.
KCB said the debt-relief measures have seen customers apply for their loans to be restructured,credit lines expanded and loan tenures extended to keep them financially afloat.
KCB has also waived fees associated with loan restructuring and those for mobile transactions below a thousand shillingsDuring the period under review, the lender’s total operating income surged 17 per cent to Sh45.0 billion compared to Sh38.6 billion in June 2019.Net interest income was up 22 per cent to Sh31.1 billion from Sh25.4 billion, riding on additional investments in government securities and lending.Non funded income was up six per cent to Sh14.0 billion from Sh13.2 billion, driven largely by revenues from the digital proposition, growth in the forex income and additional income from National […]
