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By Omar Mohammed
NAIROBI, May 20 (Reuters) - KCB Group’s first-quarter profit missed expectations due to the impact of coronavirus, Kenya’s biggest lender said on Wednesday, adding that the pandemic was likely to affect its performance for the next two quarters.
Profit after tax rose 8% in the first quarter to 6.3 billion Kenyan shillings ($59 million), the bank said.
The quarterly performance was below expectations because of a tougher operating environment exacerbated by the coronavirus outbreak, KCB Group’s chief executive Joshua Oigara said.
“We expect performance in the next two quarters to be impacted as the crisis is affecting the ability of customers to service their loans and reducing the demand for credit,” Oigara said.
“We have taken measures to conserve our capital, manage costs and keep a keen eye on liquidity.”
The first-quarter rise in profit was driven partly by a boost to interest income from loan book growth, the bank said.
Last week, KCB said it had restructured 80 billion shillings in loans, about 15% of its book.
Kenya’s central bank has allowed lenders in the East African nation to offer relief to distressed customers from mid-March, after the first case of the COVID-19 was reported.
The country’s seven top lenders have since restructured loans worth 176 billion shillings, central bank Governor Patrick Njoroge said earlier this month.
KCB, which operates in Tanzania, South Sudan, Uganda, Rwanda and Burundi with an office in Ethiopia, said on Wednesday that total operating income rose 22% to 22.95 billion shillings in the first quarter.
Net interest income jumped 18% to 15 billion shillings, helped by investments in government securities and lending.
The ratio of non-performing loans increased to 11.1% or 66.2 billion shillings, mainly due to last year’s merger with National Bank of Kenya (NBK), which added 25 billion shillings in bad loans.
$1 = 106.8000 Kenyan shillings Reporting by Omar Mohammed; Editing by Jan Harvey