NAIROBI, Kenya, May 22 – Kenyan’s biggest bank by assets Kenya Commercial Bank (KCB) has restructured loans worth over Sh115.1 billion, to beat Equity Bank, which has reviewed Sh92 billion since the coronavirus pandemic swept into the country and destabilized businesses and lives of ordinary Kenyans.
In a statement, the bank says the debt-relief measures, which were proposed by the Kenyatta-led administration to cushion Kenyans against the impact of the pandemic, have seen customers apply for their loans to be restructured, credit lines expanded and loan tenures extended to keep them financially afloat.
Since mid-March, the Bank has approved the restructuring of Sh91.3 billion worth of corporate loans and an additional Sh20.4 billion in loans to mortgage customers. A further Sh3.4 billion for retail customers has also been approved.
KCB Group CEO and MD Joshua Oigara said customers can still seek deferment of loan payments on their personal, business, corporate and housing loans for disruptions caused directly by the COVID-19 pandemic.
“We made a promise after the pandemic that we would walk the difficult journey ahead hand in hand with our customers. We are therefore offering relief to our customers, upon application so that they are able to weather this storm that was unforeseen the world over. We believe this will not only cushion businesses but create a multiplier effect that will ultimately help to save jobs,” said Oigara.
“We know that the pandemic has affected everyone and we are offering extended financial assistance to provide additional relief to our customers to meet their needs and ambitions. We believe this will go a long way in helping them navigate through their most urgent and challenging situations.”
The relief accommodation is being extended to distressed customers upon request and on a case-by-case basis, based on their circumstances arising directly from the pandemic.
For personal check-off loans and scheme loans, upon request by the individual borrower and the employer (corporate) respectively, the customers can enjoy an extended moratorium benefit for a period by 3 months.
Residential and commercial mortgages customers are getting a moratorium on the principal or both principal and interest for 3-6 months with interest being capitalized monthly as it falls due. However, the Bank could still extend the moratorium for a maximum of 12 months, depending on the severity of the COVID-19 effects on the customer’s business.
On the other hand, micro, small and medium-sized enterprises (MSMEs) can opt for repayment moratorium of 3 months; waived negotiation fee for restructured facilities; and extension of period for up to 3 months as part of their debt relief accommodation.
Corporate customers can opt for capitalization of principal and interest in arrears as at March 31, 2020, as well as capitalization of future interest for 3-6 months based on cash-flows. Further, the Bank also avails a 3-6 months’ moratorium on principal on deserving sectors.
The Bank will meet all the costs related to the extension and restructuring of loans. Customers who wish to access the relief are encouraged to contact the Bank either through their relationship manager or contact center or by visiting any of our branches.
The announcement comes at a time when lender has just announced its financial results for the first quarter ending March 31.
KCB net profit during the review period stood at Sh6.2 billion, up from Sh5.7 billion the year before, on higher interest income and fees on the transaction. Its loan book expanded 19.2 percent to Sh553.8 billion.
The bank projected that its results for the rest of the year will be affected by the pandemic.
“We expect performance in the next two quarters to be impacted as the crisis is affecting the ability of customers to service their loans and reducing the demand for credit, ” Oigara said in a statement on Wednesday.
In Mid March, Central Bank allowed lenders to offer relief to distressed customers after the first COVID-19 case was reported.
The bank regulator in late April revealed that the industry players had restructured loans worth Sh273 billion.