Pan-African lender Ecobank has posted an after tax loss of Sh2 billion for 2016 weighed down by bad loan provisions and a write off of bond premium from its books.
The firm, which returned Sh90.3 million profit the previous year, said the Sh1.2 billion provisioning for bad loans and the writing off of Sh1.9 billion unarmotised premium on government bonds had pushed it back to loss.
“Despite posting growth in interest income from Sh4.1 billion to Sh4.4 billion during the period in review, the impact of the above two business decisions has seen Ecobank Kenya record a Sh2 billion loss in 2016 compared to a profit after tax of Sh90.3 million the previous year,” the lender said.
Ecobank Kenya managing director Sam Adjei was optimistic the ongoing cost-cutting exercise would, however, see it out of the woods.
Ecobank Kenya hopes to cut costs by more than 15 per cent this year after transferring key services to digital banking.
The bank launched its unified digital banking platform in January and announced plans to close nine of its 29 branches in the country.
The downscaling is expected to help cut operational costs at a time bank margins have been slashed following capping of interest rates.
“In 2017, we are focusing on reducing our non-performing loans by implementing an aggressive recovery programme,” said Mr Adjei.