Bad loans at Ecobank drop by 62 pc

0
521
Ecobank logo
PHOTO/COURTESY: businesstrumpet.com

Pan African lender Ecobank Kenya has seen its non-performing loans (NPLs) drop to Ksh. 3 billion in the first six months of the year down from Ksh. 8.1 billion recorded in a similar period last year.

According to the Business Daily, the Ksh. 5.1 billion or 62 percent decline in bad loans has been attributed to the firm implementing an aggressive strategy to balance its books.

“Three years ago, we embarked on a journey to strengthen our balance sheet. This has seen us consistently pursue strategies aimed at creating quality assets while laying greater emphasis on recoveries,” Ecobank told the Business Daily last week.

“We recovered some of the bad loans, wrote off others while our parent company, the Ecobank Transnational Incorporated (ETI) absorbed some. We are now at a better position to attract new quality loans and finance our customers to meet their growth needs,” Ecobank added.

In the period under review, the bank’s loan loss provisioning fell by Ksh. 63 million to Ksh. 34 million while loans grew from Ksh. 14.3 billion to Ksh. 20.7 billion. Interest from the loans grew to Ksh. 829 million up from Ksh. 804 million recorded in the first half of 2018. This contributed to the bank registering a Ksh. 140 million post tax profit up from Ksh. 61 million recorded in a similar period last year. Commissions on loans also contributed to the improved performance after jumping by 50 percent to Ksh. 161 million in the period under review up from Ksh. 105 million recorded a year earlier.

Despite the significant increase in profits, the Business Daily reports that the bank’s NPLs proportion makes up 14 percent of the lender’s loan book, which is higher than the industry rate of 12.6 percent.

ALSO READ: Co-op Bank profits grow in H1 2019

LEAVE A REPLY

Please enter your comment!
Please enter your name here