This archive report was first published on 21 August 2019.
On August 21, 2019, Prime Bank announced a significant increase in its net profit, rising by 32 percent to Sh1.25 billion for the six months ending June.
The lender's focus on government securities played a crucial role in this growth, as interest from government paper rose from Sh1.4 billion to Sh2.2 billion.
Prime Bank's decision to shift funds from the private sector to the National Treasury, where government securities rose from Sh20.5 billion to Sh36.6 billion, contributed to this increase.
However, the bank's interest income from loans fell from Sh2.2 billion to Sh1.9 billion, and fees and commission on loans declined from Sh127 million to Sh94 million.
Despite a jump in souring loans, which increased from Sh2.7 billion to Sh3.7 billion, Prime Bank was able to reduce its loan loss provision from Sh111 million to Sh80 million.
The bank's ability to mobilize Sh78.6 billion in customer deposits, up from Sh65.7 billion mid-last year, also contributed to its growth, although this came at a cost, with interest expense rising from Sh1.9 billion to Sh2.2 billion.
