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Loss making season hit banks : The Standard



Wilfred Kiboro, Family Bank Board Chairman (Middle)

NAIROBI, KENYA: Banks need a turnaround plan as small lenders posts losses and decline in profits amid reduced loans to customers under the rate cap regime.

National Bank made Sh7 million net profits in the 12 months to December last year a 98 per cent fall from Sh410 million in 2017.
Loans to customers declined from Sh57 billion to Sh47 billion out of which Sh31 billion was in default.
Another state lander, Consolidated Bank sunk further into losses posting Sh540 million loss in 2018 down from a loss of Sh334 million in 2017.

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Development bank also owned by the government sunk from Sh9 million profit in 2017 to Sh5.8 million loss.
Housing Finance posted a net loss of Sh598 million from a profit of Sh126 million last year after loans to customers declined from Sh49 billion to Sh43 billion.
On the flip side, Family Bank which had posted a loss of Sh1 billion in 2017 rebounded to a profit of Sh244 million in 2018 on a turnaround strategy that saw it push lending from Sh43 billion to Sh44 billion mainly over their mobile application.
“Last year, the Bank invested heavily in revamping our PesaPap mobile application and greatly enhanced the features as well as the customer journey and experience. We have advanced over Ksh1.2Bn through the App since the launch of the mobile lending service in July 2018,” said Family Bank Board Chairman, Wilfred Kiboro.
HF says it has embarked on an aggressive business transformation strategy to turn around performance and accelerate growth to profitability by end of 2019.
The Group CEO, Robert Kibaara said HF Whizz, the digital banking business which was launched in July 2018 the lender has acquired 550,000 new customers, reflecting a 600 per cent jump in customer numbers; disbursed over 1,000 loans per day with the number of disbursements growing daily and registered transactions exceeding Sh2.5 billion.
The Government has been meaning to merge the three falling banks as a turnaround plan but recent developments indicate they will brave the tough environment with different strategies.
Development Bank of Kenya will be merged with Kenya Industrial Estates, Uwezo Fund, Youth Enterprise Development Fund, Women Enterprise Development Fund, and IDB Capital Limited.
Consolidated Bank wants a strategic investor to pump in Sh3.5 billion and take a controlling position in the bank while National Bank recovery strategy is yet to be established.

Housing FinanceNational BankConsolidated Bank

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