NAIROBI, Kenya, Mar 30 – Consolidated Bank has recorded a 118 percent jump in pre-tax profit for the year ended December 31, 2015 to hit Sh48.8 million up from a loss of Sh274.2 million over a similar period in 2014.
According to the bank, the continued recovery is mainly attributed to growth in normal business revenues and a significant increase in recovery of bad debt in 2015.
It is also attributed to the write backs on the non-performing loans increasing by a significant 580 percent to Sh492.3 million up from Sh72.3 million in 2014.
The bank’s CEO Thomas Kiyai said they have been focusing on debt recovery which has helped it earn the success it has been able to realise.
“When I joined the bank, we decided to focus on debt recovery; we strengthened the unit whilst creating an early recovery unit to engage and handle accounts showing signs of possible default early on before they become non-performing. This approach has clearly borne fruit,” he explained.
The bank’s total non-performing loans fell to Sh1.55 billion in 2015, down from over Sh2.33 billion in 2014 while the overall loan book remained on an even keel, growing slightly to Sh9.2 billion.
Speaking on bad debts, the CEO admitted that the bank has had a history of bad debts which has eroded shareholders’ funds. To this, Kiyai said that the bank is working to recover much of the debt that before was thought unrecoverable.
“On this, we have made significant progress as can be discerned from our books,” he added.
Going forward, Kiyai said that the bank is hoping to have even better results this year with more write backs of already provisioned for bad debt expected to improve the bottom line.
“The bank has also been working to contain costs and overheads, cutting back on expensive deposits, strengthening the focus on growing non-funded income as well as enhancing operational efficiencies,” Kiyai said in conclusion.
The results come at a time when there is a plan by the government to merge the bank with National Bank of Kenya, Development bank of Kenya and other State owned lenders so as to sell government assets to private investors.