KCB has restructured Sh80 billion worth of loans giving customers a relief in repaying their loans during these tough times of covid-19.
The relief is worth 15 percent of the total KCB’s Sh535.3 billion loans as of December 2019. The amount is also a 45 percent of Sh176 billion loans reconsidered by the top seven largest banks in the country, including Co-op Bank, Equity, and NCBA.
“As KCB, we have restructured loans running into Sh80 billion…this is mainly in a three-month moratorium on interest and principal,” said Joshua Oigara, chief executive of the country’s biggest bank by assets.
The restructuring was fueled by the Central Bank of Kenya (CBK), as it was evident that many borrowers would be unable to meet their obligations fully.
Bank earnings from lending are set to drop by a large margin this year due to the deferment on interest, among other restructured terms on credit.
CBK has tried to be more flexible with those whose loans were active as of March 2, 2020, as a way to help them during the pandemic.
“You will start to see early impact on bank earnings through increased provisions in the first quarter (ended March),” said Mr Oigara.