By Ronald Njoroge NAIROBI, (Xinhua) --
Kenya’s listed banks recorded a 13.8-percent decline in
core Earnings Per Share (EPS) growth for the first six
months of 2017, compared to 15.5 percent in a similar
period last year, a report released on Monday shows.
assessment by Nairobi-based investment firm Cytonn
Investment noted that the poor performance of the
banking sector was primarily on the back of an
8.1-percent decline in Net Interest Income (NII)
following the capping of interest rates in 2016.
industry’s loan growth came in lower as private sector
credit growth slowed to 2.1 percent in the first half of
2017, below the government’s set target of 18.3 percent,
with banks adopting a more prudent credit risk
assessment framework to ensure quality loan books,” said
Cytonn’s 2017 Half year Banking Sector Report.
“Consequently, allocation to government securities by
banks rose to 32.2 percent between January and June
2017, up from the 29.4 percent experienced in a similar
period in 2016,” noted Cytonn.
the banking sector grew at 14.4 percent during the first
half of the year, a faster rate than loans, which grew
by 9.3 percent. The sector has remained resilient by
adopting a disciplined banking approach.
noted that consolidation is set to gather pace as key
issues such as increased loan loss provisioning and the
regulated loan and deposit pricing framework prevail in
this challenging operating environment.
in turn transit the industry into one with fewer but
stable banks, leading to a more efficient and stable
banking sector,” says the report.