For the first time in 10 years, Kenyan subsidiary of pan-African banking group, Bank of Africa, controlled by Moroccan group BMCE Bank of Africa, ended a year with a net loss, of Sh1.02 billion, or $10 million. “The growth in loans which went bad impacted our business,” bank’s managing director, Ronald Marambii told journalists in Kenya.

In 2015 when the bank recorded the loss, it had made Sh6.2 billion interest earnings, up 14.5% from 2014. Meanwhile, non-performing loans soared from Sh2.4 billion to Sh9.7 billion, about half of which to 15 companies. Under these conditions, the bank made Sh2.1 billion of provisions, mentioning a default risk for some of its creditors.

Recover its money is now one of the bank’s main goals. It currently is in court to get Kundan Singh Construction International, a company that obtained contracts worth billions under the regime of former President Daniel Arap Moi, to reimburse Sh476 million it borrowed. The bank is also greatly exposed to Mumias Sugar which is facing significant financial challenges, though it refuses to reveal how much these challenges cost it.

Mumias Sugar however has the support of the government which during a visit last March 26, through Vice-President William Ruto, announced it planned to mobilize Sh3 billion to help the company pay sugar cane producers and employees. BOA Kenya’s managing director however says “it will take about three years to recover a significant part of the money”.

Idriss Linge