NCBA restructures Sh35bn loans

John Gachora
NCBA Group managing director John Gachora. FILE PHOTO | NMG 

NCBA Group #ticker:NCBA has restructured Sh35 billion loans equivalent to about 14.2 percent of its net loans at the end of March to cushion customers hit by the coronavirus crisis as it revealed a net profit of Sh1.63 billion in Quarter One.

The bank, like the rest in the industry, has announced repayment breaks of up to three months on all loans as customers hit by cash flow hitches seek flexible terms.

The lender is the fourth bank after KCB Group #ticker:KCB, StanChart #ticker:SCBK and Absa Kenya #ticker:ABSA to disclose the impact of the health crisis on its loan book following a loosening of the loan repayment rules by the Central Bank of Kenya (CBK) last month.

“Since the pandemic began, we have restructured loans worth up to Sh35 billion, offering much needed relief to thousands of our customers,” said NCBA Group managing director John Gachora.

He made the announcement after disclosing quarter one results of the NCBA, which was borne out of a merger between NIC Bank and the CBA Group last year.


The net profit stood at Sh1.63 billion but it is not possible to capture the growth because it disclosed the Sh1.29 earnings that CBA Bank posted in a similar period last year. The NIC Bank reported a net profit of Sh1.30 billion in the first quarter of 2019.

The bank did not comment on the potential impact of the loan restructuring on its earnings this year.

Mr Gachora reckons that the bank will go slow on lending to protect its earnings from effects of Covid-19.

World Bank expects Kenya’s economic growth will slow down to 1.5 percent this year, and contract one percent in the worst-case scenario as the virus saps demand from trading partners like Europe, as well as disrupt supply chains and domestic production.

This has led to layoffs, reduced cash flow for businesses and forced unpaid leaves, which have set the stage for loan defaults.