The profits of four Kenyan banks that recently released their quarterly financial results have been hit by soaring bad debt due to the negative effects of the coronavirus. these are Co-operative Bank, Absa bank, KCB Bank and Equity Bank.

While the Co-operative Bank saw its net profits drop 10% in the third quarter of 2020, Absa's fell 65% to 1.9 billion shillings ($17.3 million ) in the first 9 months of the year, compared to 5.5 billion shillings ($50.2 million) in the same period last year.

For its part, KCB Bank's profits fell by 43% while those of Equity Bank fell by 14%.

Of these four banks, Co-op Bank was therefore the least impacted by bad debts while Absa Bank was the most affected. Nevertheless, Co-op Bank's total operating expenses increased by 18%, from 19.8 billion shillings ($180.9 million) to 23.5 billion shillings ($214. million) in due to higher provisions for loan losses.

Commenting on the results, Co-op Bank Managing Director Gideon Muriuki said "the increase in loan loss provisioning was the result of the challenges faced by businesses and households as a result of the disruption caused by the ongoing pandemic.

Kenya is one of the 6 African countries where the banking sector will bear the brunt of the negative effects of the coronavirus for at least 3 years, according to the latest report by the financial rating agency, Standard & Poor's (S&P). The institution believes that despite the measures taken by Kenyan commercial banks (maturity extension, adjustment, business model, etc.) to deal with the coronavirus, the banking sector will continue to be tested.