23 C
Kenya
Thursday, July 9, 2020

Sh. 4.5 billion loan to CIC Insurance shows Co-op Bank’s lending muscle

Must Read

Jamii Bora accepts Sh. 1 billion buyout bid from Co-op Bank

The shareholders of Jamii Bora Bank have accepted a Sh. 1 billion acquisition offer from the Co-operative Bank. The...

Ronald Karauri: Kenyans were to blame for SportPesa’s fall

SportPesa operations in Kenya: Sports betting is set to make a comeback. This is after the government reversed its...

Businessman who moved over Sh. 1.3 billion in his M-Pesa shops

Can you imagine an M-Pesa business line that moves billions of money every year? Well, this is not fiction,...

Last year the CIC Insurance Group took a Sh. 4.5 billion loan from the Co-operative Bank to fund the payment of a Sh. 5 billion corporate bond that was due on October 2, 2019. This has been revealed through the latest financial annual report by CIC.

According to the report, the Co-op Bank, which has a 24.8 percent indirect stake in CIC Insurance Group, gave out the loan a few days before the corporate bond matured.

Co-op Bank ranked in top two best banks in Kenya

“The company acquired a loan facility of Sh. 4.5 billion from Co-operative Bank, a related party on October 1, 2019 at a rate of 12.5 percent with a tenure of five years,” CIC said in the annual report. “The loans were obtained mainly to enable the company to repay the corporate bond which matured on October 2, 2019.”

The insurance group further disclosed that the loan will be paid at the end of the loan term while interest will be paid three times a year in a structure aimed at easing pressure on the insurer’s cash flows.

Strikingly, the advancement of the funds by Co-op Bank has come out to show the lender’s financial stability, muscle and capital adequacy at a time when a majority of banks have been shying away from lending. “It is also worth noting that apart from this loan, the bank is finalizing on its acquisition bid for Jamii Bora Bank. This shows that the bank is in a good capital position and is looking to generate more revenue through acquisition, strategic expansion and interest income,” said financial analyst Reuben Kosgey.

Co-op Kenya, which is mainly owned by members of co-operative movement, is the fourth-largest lender, controlling 9.63 percent of the market with 159 outlets. In a market review by Cytonn Investments on the the performance of banks in the first quarter of 2020, the bank was ranked as the second best in Kenya.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

174,135FansLike
11,005FollowersFollow
143FollowersFollow
266SubscribersSubscribe
WhatsApp
Telegram

Latest News

Huawei Kenya and Partners Hold Online Job Fair with 40 Positions Available

Huawei Kenya and Partners Hold Online Job Fair with 40 Positions Available Today, Huawei Kenya and their partners organized an...

Wambui Collymore: This is where we deposited Bob’s ashes

It is one year since the former Safaricom chief executive officer Bob Collymore died. He died on July 1 last year. He was the...

Jalang’o now joins KISS FM breakfast show

Jalango Kiss FM: Popular comedian Jalang'o has joined Radio Africa's KISS FM. The move comes barely days after controversial morning co-host Andrew Kibe left...

Shock as marathoner Wilson Kipsang banned for four years over doping

Wilson Kipsang Banned: NBC Sports: Wilson Kipsang, a former marathon world-record holder and Kenyan Olympic bronze medalist, was banned four years for whereabouts failures...

Chinese companies tap into African markets through global trade week

Global Trade Week: With more than 20 years of global experience in the exhibition industry MIE Events has pioneered the channel for Chinese companies...

More Articles Like This

- Advertisement -