Kenya's mid-tier lender annual net loss nearly triples and hits USD10m

The bank was unable to withstand the mixed operating environment last year which was occasioned by prolonged electioneering period.

The mid-tier lender, which attracted public scrutiny in 2016 after being mentioned in the infamous NYS scandal, saw its net loss of Sh352.2 million ($3.52m) in 2016 increase by Sh648 million ($6.48m) to Sh1 billion ($10m).

The lender attributed its tribulations to among other factors effects of interest cap, tough operational environment brought about by prolonged general elections and a reduction in net interest income which dipped 37.7 percent to 4.38 billion shillings during the period.

As effects of the interest rate cap persists, which the government last week announced it would be scrapping due to its negative impact on the economy, the bank recorded a reduction in lending as loans and advances were down 39% from  Sh10 billion ($100m) to Sh6.1 billion ($61m).

The bank was unable to withstand the mixed operating environment last year which  was occasioned by prolonged electioneering period and as a result saw the bank cut its total operating expenses to Sh7.9 billion ($79m) , down from Sh8.5 billion ($85m) recorded in 2016.

Similarly total liabilities also increased marginally by 1.1 percent to Sh57.4 billion ($574m) up from KES 56.7 ($567m) billion realized in 2016.

Net non-performing loans also surged 63% to stand at Sh6 billion ($60m) up from Sh3.7 billion ($37m).

There was however, a marginal increase in non-interest income in 2017 which stood at Sh2.2 billion ($22m) last year compared to KES 2 billion ($20m) posted a year earlier.

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