It is now acknowledged that commercial banks have put the ghost of bad debts behind them and have moved on to new clean lending books. However a lot of the decline in non-performing assets can be attributed to an increase in the overall loan book (not really a decline)
Also, the future may not be without a repeat if you fast forward two years from now when a fraction of the unsecured loans being hawked at anyone with a pay slip now will likely have gone bad. With the passage of the in duplum rule banks have to cut their losses and begin collection efforts as soon as they realise a loan is in trouble.
But the courts are clogged and it is difficult to collect from unsecured loans as there are no assets to recover and where the amounts being pursued are not worth the legal cost in money and time.
Other recent happenings
- Diamond Trust (Kenya) to participate in rights issue of Diamond Trust Tanzanian where it owns 33%
- Equity bank growth getting super heated?
- Family Bank is Kenya’s newest bank
- Housing finance new product for first time homeowners
- Kenya Commercial Bank gets a new CEO
- Perennial loss maker Oriental bank (formerly Delphis) is on track for a profit this year following a restructuring deal at Miwani Sugar.