Banks loan restructures hit Ksh.1.4T in October


Banks loan restructures hit Ksh.1.4T in October

In Summary

  • The loan restructures to the end of October represent 46.5 per cent of the total banking sector loan book of Ksh.2.97 trillion and is in line with directives by the Central Bank of Kenya (CBK) as per emergency measures issued in mid-March.
  • Of the restructured loans, personal and household loans equal to Ksh.303.1 billion or 36.1 per cent of the segment’s loan book. Meanwhile, other sectors have taken the bulk of restructures at Ksh.1.1 trillion with enterprises in trade, manufacturing and real estate marking the highest relief.
  • In spite of growing uncertainties on the sector’s asset quality, the ratio of gross non-performing loans has held steady at 13.6 per cent, the same as August boosted by recoveries of credit in trade, manufacturing and construction.
   

Local banks have now restructured Ksh.1.38 trillion in customer loan repayments as part of relief measures passed on to borrowers over COVID-19 related distresses.

The loan restructures to the end of October represent 46.5 per cent of the total banking sector loan book of Ksh.2.97 trillion and is in line with directives by the Central Bank of Kenya (CBK) as per emergency measures issued in mid-March.

Of the restructured loans, personal and household loans equal to Ksh.303.1 billion or 36.1 per cent of the segment’s loan book.

Meanwhile, other sectors have taken the bulk of restructures at Ksh.1.1 trillion with enterprises in trade, manufacturing and real estate marking the highest relief.

Combined, the banking sector loan restructures stood at Ksh.1.12 trillion at the end of August this year.

Commercial banks are expected to keep reviewing loan repayments to banking sector customers until the end of March 2021.

In spite of growing uncertainties on the sector’s asset quality, the ratio of gross non-performing loans has held steady at 13.6 per cent, the same as August boosted by recoveries of credit in trade, manufacturing and construction.

At the same time, banks have disbursed 92.7 per cent of funds accessed from the lowering of the cash reserve ratio (CRR) in March or an equivalent Ksh.32.6 billion.

Credit flow to the private sector has meanwhile remained resilient at 7.7 per cent as of October in spite of commercial banks attaching a higher risk premium to customers.

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