Finance

Kenya Commercial bank set aside $101.5mln in H1 2020 to face credit risks

Kenya Commercial bank set aside $101.5mln in H1 2020 to face credit risks
Monday, 17 August 2020 17:17

Over the first half of this year, Kenya Commercial Bank set aside KSh11 billion ($101.5 million) as a provision to meet the risks of loan defaults. The amount is 263.8% higher than that of the same period last year.

According to the new international standards for the accounting presentation of banks' financial results, when banks foresee a high risk that loans granted to their clients will not be repaid, they must set aside financial resources to deal with it.

In some ways, KCB was forced to set aside money for loan defaults due to the covid-19. Also, the banking group has to face the credit risks of the National Bank of Kenya, the acquisition of which was finalized by the end of 2019.

Under these conditions, the group's operating expenses increased by 56.3% compared to the same period in 2019, reducing margins. Net income after tax dropped by 41% compared to the first six months of 2019. Despite this underperformance, the Bank remains on solid fundamentals.

During this pandemic, KCB heavily invested in securities issued by the Kenyan Treasury, which has enabled it to increase its interest income. KCB also benefited from its digitalization strategy. Despite the lockdown, its customer transactions grew, supported by the increase in mobile transactions.

Stanbic Bank and Co-operative Bank also experienced significant increases in credit risk provisions. For the three banks, the total resources allocated for credit risk coverage is KSh14.6 billion shillings.

Idriss Linge

On the same topic
• Fily Sissoko will oversee a $8.5 billion World Bank portfolio spanning Mozambique, Madagascar, Mauritius, Comoros, and Seychelles.• His mission...
• Bassirou Diomaye Faye denounces credit rating agencies’ methodologies as ill-suited to African contexts.• Senegal urges reforms to enable fairer...
(AfDB)-The Board of Directors of the African Development Bank Group has approved a $474.6 million loan for South Africa's Infrastructure Governance...
New card enables African payments without using US or European networks Aims to lower costs, protect financial data, and boost intra-African...
Most Read
01

Lebara Group is now bringing its affordable and reliable mobile services to Africa, starting with Ni...

Telecoms: Lebara Enters Nigerian Market with Strong Competitive Ambitions
02

• Gates Foundation commits $1.6 billion over five years to Gavi.• Bill Gates warns of rising ch...

Gates Foundation Pledges $1.6 Billion to Gavi to Boost Global Child Vaccination
03

Transport and food prices have been climbing steadily across Africa in recent years. In Côte d’Ivoir...

Côte d’Ivoire’s Fuel Price Cuts Haven’t Slashed Transport Costs–Yet
04

In a West African financial landscape marked by tighter regulation of the fintech sector, digital fi...

In Five Years, Francophone Africa Will be A Major Force in African Tech –Régis Bamba
05

• Maritime sector faces renewed risks amid military tensions in the Middle East• Blockade fears at S...

Israel-Iran conflict raises new threats for global shipping and oil trade
Enter your email to receive our newsletter

Ecofin Agency provides daily coverage of nine key African economic sectors: public management, finance, telecoms, agribusiness, mining, energy, transport, communication, and education.
It also designs and manages specialized media, both online and print, for African institutions and publishers.

SALES & ADVERTISING

Benjamin FLAUX
bf@agenceecofin.com 
Téls: +41 22 301 96 11 
Mob: +41 78 699 13 72
Média kit : Download

EDITORIAL
redaction@agenceecofin.com

More information
Team
Publisher

ECOFIN AGENCY

Mediamania Sarl
Rue du Léman, 6
1201 Geneva
Switzerland

 

Ecofin Agency is a sector-focused economic news agency, founded in December 2010. Its web platform was launched in June 2011. ©Mediamania.

 
 

Please publish modules in offcanvas position.