The restructured loans, common with homebuyers, accounted for 22.5 percent of the total Sh101 billion loans that KCB Group has restructured in the period between mid-March and June.
This reflects the depressing environment facing the sector where property repossessions are happening in droves despite fewer takers during auctions.
KCB disclosed that it received 7,002 applications for loan restructuring, with 640 coming from the real estate segment where outstanding loan book is Sh115.1 billion.
KCB #ticker:KCB real estate borrowers have applied for Sh22.7 billion restructuring on their loans, accounting for the highest value of loans that the lender has changed terms since Covid-19 struck.
The restructured loans, common with homebuyers, accounted for 22.5 percent of the total Sh101 billion loans that KCB Group has restructured in the period between mid-March and June.
This reflects the depressing environment facing the sector where property repossessions are happening in droves despite fewer takers during auctions.
KCB disclosed that it received 7,002 applications for loan restructuring, with 640 coming from the real estate segment where outstanding loan book is Sh115.1 billion.
Another 4,002 came in from personal loans while manufacturing and trade had 364 and 778 applications respectively.
Real estate accounts for 18.1 percent of KCB’s Sh642 billion loan book. This is the second highest after personal or household loans which amount to Sh230.7 billion or 37.7 percent of the loan book.
Building and construction, which is closely related with real estate, saw Sh12.3 billion or 29 percent of the total Sh42.2 billion restructured.
Other high restructurings came from the Sh48.96 billion trade loan book where Sh16.1 or 32.8 percent saw changes in their repayment terms.
Hotels, restaurants and tourism businesses have restructured Sh15 billion or 55.7 percent of their Sh26.9 billion KCB loans.
The high portion of restructuring in hotel and restaurant businesses came on the back of closure of these business as well as suspension of passenger flights into and out Kenya to control the spread of Covid-19.
Another 30.5 percent of Sh26.93 billion that had been given to transport and communication sector have also been restructured.
Government imposed social distancing rules in public transport and closed movement into and out of counties such as Nairobi and Mombasa, hurting revenues in the sector.
Personal or household loans, which take up 37.7 percent of the Sh612 billion KCB loan book saw 16.4 billion or Sh4.7 percent being restructured.
The loan restructurings in an environment of persisting Covid-19 infections saw KCB increase the provisioning for potential loan losses 3.6 times to Sh11 billion from Sh3 billion, eating into its bottom-line.
Half year net profit tumbled 40 percent to Sh7.5 billion despite robust earnings from the mainstay lending business, which saw net interest income jump 22 percent to Sh31 billion.
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Note: The results are not exact but very close to the actual.
