A Stanbic Bank branch on Kimathi Street, Nairobi. FILE PHOTO | NMG Stanbic Bank customers have resumed payments on Sh32 billion or 80 per cent of the loan book that had been restructured on economic hardships brought by the Covid-19 pandemic, signalling improving financial position among borrowers
Chief executive at Stanbic Bank Kenya Charles Mudiwa said in an interview that about 80 per cent of the Sh40 billion that had been restructured is now being serviced just as was the case before the infectious virus struck Kenya mid-March last year.
The bank had between April and December last year rescheduled payments on Sh40 billion or 20.4 per cent of the Sh196.3 billion total loan book, forcing it to increase provisions for loan defaults.
“By end of the year, about 80 per cent indicated that they did not need the moratorium anymore because their economic conditions had improved,” said Mr Mudiwa in an interview with the Business Daily.
“A lot of this has now gone back to normal, meaning the customers are repaying as before Covid-19. By end of this month, we think about 95 per cent will have gone back to normal.”
economic headwinds
The resumption in repayment offers hope to the lender that the fortunes of most of the customers who had run into economic headwinds are improving.
Mr Mudiwa says that this was the part of the reason that it softened end of year loan loss provisioning compared to the pace of growth that had been seen in June and September.
Stanbic’s loan loss provisioning rose 54.76 per cent to Sh4.87 billion — a slowed pace than in September when it increased the figure by 61 per cent.
The lender reported 18.6 per cent drop net profit to Sh5.19 billion in the financial year ended December.
Stanbic however announced that it will pay Sh1.5 billion as final dividend, representing Sh3.80 per share, a drop from Sh2.79 billion paid out in 2019.