This archive report was first published on 18 August 2019.
On August 18, 2019, Bank of Africa (BoA) announced a significant improvement in its financial performance, with net profit doubling to Sh114 million for the six months to June.
The lender achieved this milestone by implementing tighter lending and cost-cutting measures, which resulted in a reduction of bad loans and lower loan loss provisioning.
Specifically, BoA cut loans from Sh23.5 billion to Sh20.9 billion, reducing bad loans by Sh1.8 billion and cutting loan loss provisioning from Sh349 million to Sh261 million.
As a result, income from interest on loans declined from Sh1.5 billion to Sh1.1 billion in the period under review.
However, the lender diversified its income streams by generating Sh461 million from trading forex, a significant increase from Sh198 million in the same period last year.
Customer deposits remained relatively stable at Sh30.3 billion, but interest paid on deposits fell from Sh850 million to Sh611 million.
Staff costs also decreased by Sh42 million, while rental costs increased from Sh97 million to Sh133 million.
By implementing these measures, BoA was able to double its net profit and improve its overall financial performance.
