Banking
From The Report: Kenya 2016
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The banking sector is growing and profitable, although expenses are climbing faster than revenues and non-performing loans have also increased. The overall balance sheet reached KSh3.6trn ($39.6bn) in June 2015, up 21.4% from KSh3trn ($33bn) a year earlier. A number of factors also stand to benefit the sector going forward. Kenya’s banks are gearing up to participate in financing huge infrastructure projects, including power plants, port expansions, 10,000 km of roads, and the Lamu Port-Southern Sudan-Ethiopia Transport Corridor that includes a northern oil pipeline to Uganda. Meanwhile, Kenya’s growing middle class is boosting retail banking and products such as mortgages and personal loans and is likely to continue to drive the adoption of credit cards.

This chapter contains an interview with Patrick Njoroge, Governor, Central Bank of Kenya; and a roundtable with: Gideon Muriuki, Group Managing Director and CEO, Co-operative Bank of Kenya; James Mwangi, Group Managing Director and CEO, Equity Bank; and Joshua Oigara, Group CEO, Kenya Commercial Bank.

Articles from this Chapter

Overview

Further scope: The sector is robust and profitable, and there are growth opportunities at home and in the region
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With more banks per head than other major African markets, Kenya is a world leader in mobile money technology. Opportunities beckon across East Africa and beyond, and capital can be raised swiftly to meet evolving regulatory requirements. Foreign banks still face stiff competition from home-grown contenders, but the scope for future growth means more are keen to enter. Key to success in Kenya is the ability to create and grow products – and institutions – that respond to the needs of Kenyans…

Interview

A steady hand: OBG talks to Patrick Njoroge, Governor, Central Bank of Kenya (CBK)
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Interview:Patrick Njoroge The shilling has depreciated steadily against the dollar in 2015. In your view, what impact has this had on the Kenyan economy? PATRICK NJOROGE: The Kenyan shilling has come under pressure in 2015, in large part because of an appreciating US dollar against most currencies. This situation is not unique to Kenya, however. World currencies have, in general, weakened against the dollar, mainly due to the strengthening of the US economy, as well as the expectation…

Analysis

The big picture: Consolidation is likely in the crowded market
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Compared to other African countries, Kenya has a crowded banking sector. In June 2015, in a country of 43m people, there were 43 commercial banks. The top 10 banks take 70% of the market. There are also 12 microfinance banks, eight representative offices of foreign banks, 86 foreign-exchange bureaus, 14 money-remittance providers, three credit reference bureaus and one mortgage finance company. This does not include the 180 savings and credit cooperative societies (SACCOs) or microfinance institutions. To…

Interview

Access and consolidation: OBG talks to Gideon Muriuki, Group Managing Director and CEO, Co-operative Bank of Kenya; James Mwangi, Group Managing Director and CEO, Equity Bank; and Joshua Oigara, Group CEO, Kenya Commercial Bank
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Interview:Gideon Muriuki,James Mwangi,Joshua Oigara To what extent are you expecting to see consolidation in the Kenyan banking market over the short and medium terms? GIDEON MURIUKI: Since the central bank decided to raise the minimum capital requirements to KSh5bn ($55m), we anticipate consolidation in the sector, especially amongst the smallest banks. A well-capitalised banking sector is good for the economy, and we support the move by the government to raise the capital requirements.…

Analysis

The way forward: Banks are joining the race for mobile banking customers
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Nowhere is the ability of Kenyans to turn technology to commercial use better illustrated than in mobile banking. They use their phones to pay for goods and bills, make deposits and withdraw cash from agents, buy insurance, for public transport and to transfer to relatives. According to the Central Bank of Kenya (CBK), the value of transactions carried out through mobile phones rose 24.7% to KSh2.4trn ($26.4bn) in 2014, compared to KSh1.9trn ($20.9bn) in 2013. Growth drivers include rising use by…