Press Release: Consolidated Bank announced 118% jump in profitability, enhances push to rein in on non-performing loans
SME focused lender Consolidated Bank has returned a 118% jump in profit before tax for the year ended 31 December 2015, a clear indication of a successful turnaround trajectory that the bank continues to drive. Over the one year period, the bank hit Kes.48.8 Million in profit before tax; up from a loss of Kes.274.2 Million over a similar period in 2014.
According to the Bank, the continued recovery is mainly attributed to growth in normal business revenues and a significant increase in recovery of bad debt in 2015, with the write backs on the non-performing loans increasing by a significant 580% to Kes.492.3 Million up from Kes.72.3 Million in 2014.
Commenting on the robust performance over the year Consolidated Bank CEO Thomas Kiyai, who is just 10 months on the job, underscored the effort the bank has made in recovering non-performing debts and and the success this exercise has had.
“When I joined the bank, we decided to focus on debt recovery; we strengthened the unit whilst creating an early recovery unit to engage and handle accounts showing signs of possible default early on before they become non-performing. This approach has clearly borne fruit.” He said.
Total non-performing loans fell by 33% to Kes1.55 Billion in 2015, down from over Kes2.33 Billion in 2014 even as the bank took a more precautionary stance towards new lending is quite an achievement. The overall loan book remained on an even keel, growing slightly to Kes.9.2 Billion as the bank sought to consolidate its lending position.
“The bank has had a history of bad debts which has eroded shareholders’ funds. We are working to recover much of this money that before was thought unrecoverable before and we have made significant progress as can be discerned from our books.” Said Mr. Kiyai.
The bank has also been working to contain costs and overheads, cutting back on expensive deposits, strengthening the focus on growing non-funded income as well as enhancing operational efficiencies.
Consolidated bank is projecting an even stronger performance in 2016; with more write backs of already provisioned for bad debt expected to improve the bottom line, even as the bank works to enhance its core capital position.
About Consolidated Bank:
Consolidated Bank of Kenya Ltd is a fully-fledged commercial bank with over 27 years experience in the Kenyan market. Currently, the bank has 17* branches located in Nairobi, Mombasa, Meru, Murang’a, Nakuru, Eldoret and other major towns. With years of banking experience and special focus on SMEs, we are in a strong position to help growing businesses unlock their potential and sail through the complexities they may face.
Our end to end banking services include: current accounts, savings accounts, fixed and call deposits, loan and overdraft facilities, local and overseas money transfer services, local and international trade finance. We are also active in the local inter-bank money market.
The bank is fully owned by the Government with the majority shareholding in the bank (78%) held by The National Treasury. The remaining shareholding is spread over twentyfive (25) parastatals and other quasi government organizations.
Download the report: Consolidated Bank 2015 Results-Press Release