Co-operative Bank of Kenya has said it has restructured loans worth Sh15billion for struggling borrowers as COVID-19 continue to take toll on livelihoods countrywide.
“With the Covid-19 crisis, the bank has proactively engaged all the customers and reviewed terms for customers requiring an interest moratorium period, those requiring a better structure/longer repayment period and customers requiring additional funding to manage the crisis,” Mr Muriuki said.
This is in addition to Sh100m that the bank donated to the COVID-19 Emergency Fund created by President Uhuru Kenyatta.
Further, the bank says it has also managed to move 90 per cent of all customer transactions to alternative delivery channels, including mobile and internet banking as well as agents.
“Key focus on digital banking, with the all-telco MCo-opCash Mobile Wallet continuing to play a pivotal role in the growth of non-funded income with 5.6 million customers registered and loans worth over Sh16 billion disbursed in Quarter 1 2020,” Mr Muriuki said.
Meanwhile, the bank announced flat profits for the three months to March as rising workers’ pay and costs linked to loan defaults ate into the lender’s earnings.
The bank says net profit for quarter one stood at Sh3.58 billion against Sh3.59 billion in a similar period last year.
Rising employee costs and provision for bad debts ate into the bank’s income from loans and fees such as ATM transactions.
Co-op Group Managing Director Gideon Muriuki said operating expenses grew by 20.6 per cent on the back of loan loss provision and staff expenses.
Its staff costs rose to Sh3.4 billion from Sh2.7 billion while the loan loss provisions nearly doubled from Sh510 million to Sh900 million.
Banks expect reduced demand for loans in the wake of the coronavirus crisis, which has reduced business activity in what will ultimately slow down lenders’ profits.