Kenya Industry Research: Banking

Image placeholder
The Kenyan Banking Sector: Resilient in the Face of Increasing Challenges
  • Kenya Industry Research: Banking
  • Year : Mar 2021
Access Now
Summary

Going into the COVID-19 pandemic, the Kenyan banking sector was already experiencing challenges from deteriorating asset quality and moderating growth. While the interest rate cap was blamed for the reduction in the lending slowdown, we believe that the asset quality issues, delayed payments by government (pending bills) and a slowdown in the real economy (i.e. the non-fiscal driven economy) were also key contributors.

Additional Information

From an industry perspective, the banking sector’s capital metrics are strong and have been steadily rising since 2014 and even despite the sectoral challenges, increased in 2020. We attribute this to the decline in dividend payouts, a growth in deposits of about 13.0% and an increase in the holding of government securities as opposed to riskier lending activities (Loan/Deposit ratio 2019:70.2%, 2020:66.9%).

Related Publication

External Risks Set to Challenge Kenyan Banks in 2020

GCR expects the combined impact of the COVID-19 inspired global and domestic slowdown in Q2’20, alongside the locust swarm in Q1’20, to...

Bank of Africa Kenya Limited (2010-06)

A Credit Rating report is a research report providing detailed analysis utilised by GCR in the accordance of a Credit Rating.

Three months in, the challenges are increasing but indications suggest that larger corporates may weather the storm.

  • GCR expects performance across almost all corporate sectors to remain weak for the remainder of 2020 due to a collapse of consumer confidence....
Available Purchase Options: