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The bank is currently positioned as the top tier 3 bank in Kenya with its market share recorded at 0.7% as of 30 June 2021 and in addition it outperforms peers on asset quality, efficiency, and return on assets. Furthermore, we view the bank to target a niche market segment that has proved to be defendable, and its core strength lies in its relationship banking business model that has proved to be stable over the years. Track record of revenue stability is good, benefiting from a nimble organisational structure and good capital management.
The stable outlook reflects our expectations of economic recovery as a result of easing operating environment pressures and moderation in asset quality metrics in the next 12-18 months. We also expect the competitive position, funding base, and liquidity of the bank to remain stable. A downgrade could be caused by sustained higher NPLs and credit losses at 12% and 4%, respectively, and lower than 15% GCR capital ratio. The upside to the ratings could be supported by increased business diversification, improvement in asset quality, and stronger capitalisation.