Consolidated Bank back from loss-making zone

People walk past a Consolidated Bank branch in Nairobi. PHOTO | FILE 

By GEOFFREY IRUNGU

State-owned Consolidated Bank turned around to profit last year after making a loss in 2014, it said in a statement Wednesday.

The SME-focused lender returned a profit before tax amounting to Sh48.8 million, from a loss of Sh274.2 million in the previous year.

The bank said the recovery was mainly due to growth in normal business revenues and a significant increase in recovery of bad debt in 2015. The bank said the write-backs on the non-performing loans increased by a significant 580 per cent to Sh492.3 million up from Sh72.3 million in 2014.

“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,” said CEO Thomas Kiyai who was appointed 10 months ago.

The total non-performing loans fell by 33 per cent to Sh1.55 billion in 2015, from over Sh2.33 billion in 2014 even as the bank took a more cautious stance towards new lending.

The overall loan book grew slightly to Sh9.2 billion as the bank sought to consolidate its lending position.

Mr Kiyai said the bank had a history of bad debts which had eroded shareholder funds.

The bank said it has also been working to contain costs and overheads, cutting back on expensive deposits, growing non-funded income as well as boost efficiency