Browsing: Banks

Banks in East Africa are empathizing with the loss of livelihood and businesses of their clients by easing off on loan payment demands as the covid-19 pandemic continues to disrupt economies.

In 2020, top East African banks increased provisions for bad debts by over $736 million so as to reduce exposure on businesses and household loans in countries that are most affected by the pandemic.

According to a review of the banks audited financial statements, in 2019 the top eight Kenyan banks by market share tripled their loan loss provisions to $960 million from $263.11 million.

In order to take care of $1.56 billion worth of loans that had been restructured to bail out clients who were most affected by the pandemic, equity bank increased its loan loss provision by $198.6 million making it the greatest hit on its net earnings that the bank has ever experienced. This led the …

Among the measures that SASRA implemented to cushion SACCOs against the adverse effects of the COVID-19 pandemic were the suspension of AGMs last year; online approval of SACCO’s audited accounts and allowing SACCOs to restructure member loans. …

Banks continue to fill the impact of mobile money as it eats into their asset quality and profits despite partnering with telecoms.

According to a 2020 banking sector analysis report by Summit Consulting, increase in mobile money deposits has a negative connection to banks’ return on equity defined as the ability of a firm to generate profits from its shareholder’s investments in the company.

“High volume of mobile money transactions discourages customers from depositing with banks due to convenience,” the report read in part.

Accessibility and convenience of the telecom hosted platform have been boosted by the increase in the number of mobile money agents making it more attractive to the 27.9 million subscribers.

Deposits of mobile money accounted for 37.7 per cent of the slump on return on equity and deny banks of adequate deposits for investment, as most banks get money from customer deposits, which they lend out …

The private sector is not responsive to the government’s stimulus package as banks report less than desired activities in borrowing. Even though huge fiscal and monetary measures have been taken by the Central Bank, still commercial banks are facing reduced demand on borrowing.

This is evident in weekly turnovers for Interbank trading which is down 92 per cent, the lowest it has ever been over the last decade. Money market analysis for the month of May reported that the Interbank Money Market (IMM) suffered its lowest activities since 2010.

You will recall that 2010 is just two years into the global economic recession that was triggered by among other things, poor lending habits by banks in the US that led to a collapse of the real estate industry.

Numerous banks had to be bailed out just to keep people in their homes as foreclosures were rampant across the country. The …