Stanbic Bank building on Kimathi Street in Nairobi on June 29, 2019. PHOTO | SALATON NJAU | NMG
Stanbic Bank seized customers’ assets valued
at Sh381.88 million last year over unpaid loans, a 33.7 percent rise
from the previous year. The move underlines increasing debt distress by
lenders as
individuals and firms struggle with repayment.
individuals and firms struggle with repayment.
The
listed bank disclosed in its latest annual report that repossessions
for the financial year ended December 2018 grew from Sh285.6 million the
previous year with repossessed residential properties more than
quadrupling.
Assets repossessed comprised saloon cars,
prime movers and trailers, which had been financed by the bank under
vehicle and asset finance (VAF). Also seized were residential and
commercial property financed under personal markets.
The seized assets will now be auctioned to recover the sum as is the policy with many lenders.
“The
proceeds are used to reduce or repay the outstanding claim. In general,
the bank does not occupy repossessed properties for business use,”
Stanbic says in the report.
The value of residential properties seized rose from Sh19.65
million to Sh86.97 million in 2018 while other class of assets rose from
Sh265.9 million to Sh294.9 million.
During the year,
mortgage lending grew 17 percent to Sh21.02 billion, showing that more
customers were developing property. This accounted for 13.3 percent of
Stanbic’s Sh157.85 billion gross loans and advances as at end of the
year.
Newspapers have been replete with adverts of vehicles and other properties put up for auction by banks.
As
is common practice, banks rely on collateral to mitigate credit risk.
They also rely on a panel that undertakes valuation of property and
other assets used as collateral.
The repossessions came
in the year Stanbic posted a 45.5 percent jump in net profit to Sh6.27
billion, supported by growth in both interest and non-interest income.
Net interest income grew by 14 percent to Sh12.13 billion from Sh10.6 billion posted at the end of previous financial year.
The
bank cut loan loss provisions by 37.2 percent to Sh1.73 billion during
the year as the Bank continues to focus on proactive arrears management.
No comments :
Post a Comment