Online – 2020-MEA Logo The economic impact of the coronavirus has led to Kenya’s seven largest banks restructuring loans worth Sh176 billion—equivalent to 6.2 percent of the industry’s total gross loan book of Sh2.8 trillion. The pandemic has damaged Kenyan borrowers’ ability to repay their loans, particularly within the tourism sector, which has felt considerable financial pain following the suspension of international flights into and out of the country starting mid-March.
“In general, the banking sector has started to feel the adverse impact of Covid-19 as a result of slowdown in most economic sectors,” the Central Bank of Kenya (CBK) relayed to the Senate Ad Hoc Committee on the COVID-19 Situation in Kenya. The regulator also said that requests for extensions to personal loans and the restructuring of other credit arrangements are likely to ramp up in the coming months if the pandemic continues to impose lockdowns. But the central bank has made clear that it will be more flexible with respect to loan-classification requirements and the provisioning for loans that were performing on March 2 and with repayment periods that were extended or were restructured due to the pandemic.
The Banking Association South Africa (BASA) has recently detailed the financial-relief measures being provided by its banking members, noting that from the period beginning March 16 and ending April 25, South African lenders administered cash-flow relief to its customers, including payment breaks, worth R7.74 billion (US$420 million). To small and medium enterprises, similar relief has been granted worth R7.29 billion. “Of the over 1,200,000 individuals who applied for some form of relief, over 852,000 have already received assistance,” the BASA stated, adding that more than 75,000 of the 90,000 commercial, small and medium enterprises that applied have also received assistance. These numbers are expected to rise significantly going forward as more relief is approved.
Nigeria’s banks recorded strong financial results on the whole during the first quarter, with most of the period preceding the onset of the coronavirus outbreak. Seven Nigerian banks recorded a combined profit after tax of N209.16 billion ($540 million) for the quarter, according to their unaudited financial results, including Zenith Bank, Guaranty Trust Bank (GTB), Access Bank, United Bank for Africa, FBN Holdings, Fidelity Bank and Union Bank of Nigeria. Zenith Bank led the way with profit after tax of N50.53 billion for the quarter, marginally higher than the N50.23 billion recorded in first-quarter 2019. The bank’s total […]