Homes and trucks overtake Stanbic’s Sh294m asset foreclosures
- The total value of assets taken over in the year ended December was a decrease from Sh 312.3 million in the prior period as loan restructurings mitigated the increase in debt distress in the debt environment. coronavirus.
- The value of foreclosed residential properties more than doubled from 50 million shillings to 120 million shillings in the year ended December, showing that more clients have struggled to honor their mortgages.
Residential homes, sedans, major engines and trucks topped the list of 294 million shillings of assets seized by Stanbic Bank from individuals and businesses that have struggled to repay their payments. loans following the economic fallout from Covid-19.
The total value of assets taken over in the year ended December was a decrease from Sh 312.3 million in the prior period as loan restructurings mitigated the increase in debt distress in the debt environment. coronavirus.
The value of foreclosed residential properties more than doubled from 50 million shillings to 120 million shillings in the year ended December, showing that more clients have struggled to honor their mortgages.
However, the value of foreclosures for assets financed under Vehicle and Asset Finance (VAF) fell by a third to 174 million shillings, reducing total repossessions to the lowest level in three years then. that clients were asking for restructuring loans of 40.27 billion shillings.
“Assets seized at the end of the year include sedans, main engines and trailers, which had been financed by the group under the VAF and personal markets financed by residential real estate,” the company said. bank.
“The group’s policy is to sell properties seized on the open market at market value. The proceeds are used to reduce or pay off the overdue debt. “
Loan restructurings have helped alleviate the increase in debt distress that set in last year when companies cut wages and laid off workers in response to a sharp drop in income.
Last year’s value of repossessed assets was the lowest since 2017, when it stood at 285.6 million shillings, and underscores the impact of borrowers rushing to seek loan restructurings mostly under the form of longer repayment periods.
Renegotiated loans, which are debts that have been refinanced, rescheduled or postponed at the request of customers, jumped 7.4 times to 40.27 billion shillings last year.
The restructured loans are equivalent to one-fifth of the 196.3 billion shillings net loan book Stanbic held at the end of last year.
“The renegotiations resulted in the maintenance of the original financial asset, with no gain or loss recognized as a result of the restructuring,” the bank noted.
Stanbic’s restructured loans were part of the 1.7 trillion shillings, or 57 percent of the banking sector’s loan portfolio, which followed a similar route as troubled customers sought to escape the auction.
During the year, Stanbic’s mortgages rose 36% to 34.78 billion shillings, showing that more customers were buying property despite the economic hardships of Covid-19.
House prices were slashed last year due to lower demand, giving wealthy savers the opportunity to purchase homes at low prices.
The vehicle and asset finance loan book, however, was down 13.3% to 13.13 billion shillings.
Stanbic Bank Kenya chief executive Charles Mudiwa told Business Daily in an interview in March that customers resumed payments on 32 billion shillings or 80% of restricted loans, signaling an improvement in the financial situation.
The lender reported an 18.6 percent drop in net profit to 5.19 billion shillings in the fiscal year ended December.