KCB’s tally of loans restructured due to the Covid-19 pandemic has risen to exceed Sh120 billion, the country’s biggest bank has said in a new update.
The amount has jumped 50 percent from the Sh80 billion recorded in the first week of May.
The disease and measures taken to contain its spread including travel restrictions and closure of schools, and bars have made it difficult for borrowers to repay their loans. Lenders and the Central Bank of Kenya (CBK) are implementing a plan to reduce or defer interest and principal repayments for customers whose income has been impacted by the pandemic.
“We have restructured more than Sh120 billion of loans so far across our region,” KCB’s chief executive Joshua Oigara told shareholders at the virtual annual general meeting held yesterday.
Customers that benefited from the change in the loan terms include SMEs, large firms and home buyers, Mr Oigara said in the comments that were streamed live.
At Sh120 billion, the restructured loans are equivalent to 21.6 percent of the bank’s Sh553 billion loan book as of the first quarter ended March.
At the AGM, 19,136 shareholders controlling 43.2 per cent of outstanding shares participated and were asked to vote on several items such as the proposed final dividend of Sh2.5 per share.
The company said the results of the vote will be out within 48 hours.
The resolutions are, however, expected to get the support of the biggest shareholders, including the National Treasury and the National Social Security Fund (NSSF). The dividend is scheduled to be paid on or before July 3 to shareholder who were on the register on April 27.
Mr Oigara said KCB is keeping a lid on costs during this time when business is projected to slow down significantly over the next few months.
He cited reduced lending, lower transaction volumes, higher provisioning for bad debt and thinner margins on existing loans as the salient challenges facing the banking industry.