(Bloomberg) -- KCB Group Plc is pursuing defaulters as Kenya's biggest lender combines recently purchased National Bank of Kenya Ltd. into its operations.
“You'll see more actions, more demand letters going after our customers” who aren't repaying loans, KCB Chief Executive Officer Joshua Oigara said on the sidelines of a conference in Nairobi last week. “Next year is the real recovery period for the loans we have for NBK.”
The acquisition of state-owned NBK, which has 49% of its loans classified as non-performing, will almost double KCB's ratio of bad debts to 12%. Oigara aims to bring the ratio down to 8% a year after the consolidation, which will be completed during the course of 2020. The deal was approved last month by antitrust regulators.
Read more: Kenya's Biggest Bank Seeks Deals as KCB Chases 12% Profit Growth
The lender has already given debtors a taste of what's to come. State-owned East African Portland Cement Co., the nation's oldest maker of the building material, on Sept. 27 said it is seeking approval from shareholders to sell land and pay off 5.4 billion shillings ($52 million) it owes KCB. Three days earlier, KCB won a court bid to place another struggling government-owned entity, Mumias Sugar Co., under administration to protect its assets.
Read more: Kenya's Portland Cement Plans Land Sale to Settle KCB Group Loan
“That vigor will continue to remain,” the CEO said. “So we expect to recover a number of those loans.”
To contact the reporter on this story: Bella Genga in Nairobi at bgenga2@bloomberg.net
To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Vernon Wessels, Gordon Bell
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