KCB Bank, Kenya’s largest lender, reported a net profit drop of up to Kshs 10.8bilion, a 43% drop. The decline in profits is mainly due to an increase in the number of non-performing loans. The loan defaults have sharply increased this year to Kshs 96.9 billion due to the effects of COVID-19 on businesses and the overall economy.
In the previous financial year, before COVID-2019, KCB bank had reported Kshs 19.1 billion net earnings after taxes and interests.
Despite the current economic state, KCB bank CEO said they are hopeful of improving their business performance. Businesses in the region are experiencing some bit of economic recovery. Not that the effects of COVID-19 are over, but many people and organizations are finding financial stability amid the pandemic.
Also, the CEO assured their customers of their commitment to continue supporting them during this period. They will continue establishing initiatives that will help their customers run their businesses successfully.
The bank has formulated and implemented a few notable adjustments to improve the financial welfare of their customers. For instance, the increasing provision on loans to Kshs 20 billion from Kshs 5.8billion, restructuring loans amounting to Kshs 105 billion for convenient repayment terms, among other measures.
Lastly, the bank has invested significantly in government debt securities to cushion themselves from default risks. That explains why the lender’s loan book has increased to Kshs 577.5 billion, an 18.7% increase.