Commercial banks’ pre-tax profit rose by 12.6 percent to a record Sh85.8 billion in six months to June, signalling the lenders’ resilience in a tough economy that has seen multiple companies announce a sharp decline in earnings and an increase in staff layoffs.
The latest Central Bank of Kenya (CBK) data shows that banks grew their profits at a much faster pace this year compared to last year when the first half pre-tax earnings increased 9.8 percent to Sh76.2 billion. The sector has leaned heavily on the Jubilee government’s high appetite for loans, pumping billions into Treasury securities while shunning small businesses and individual borrowers, citing inability to assess their default risks due to the interest rates cap. Banks have largely starved the private sector of loans – the annual growth rate in June was a weak 5.2 percent – which has hurt the chances of more inclusive economic growth.
The lenders’ lobby, Kenya Bankers Association (KBA), acknowledges that the reliance on government securities for profit growth is ultimately unsustainable, and leaves the lenders vulnerable should the Treasury find a way of lowering its debt ceiling.
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The only sector doing pretty well, yet is still shedding jobs. I think tonight I’ll watch a comedy. There was one recommended here - Identity Thief - that’s the one I’ll watch.
You know what? The country is YOURS. Change it, and yes, you can. If we shed the bullshit and think about tomorrow, we can change Kenya. Stop being stupid by pulling each other down. That’s the key. You start building from the bottom and start pulling people along with you, not because you’re benevolent, but because you need and owe your success to them. The second part is equivalent to not burning the bridges behind you.
Banks are making billions in profits yet they still want the cap on interest rates lifted. And as if that is not an absurdity in itself you find strugglers in Kenyatalk and on Twitter siding with the banks in calling for the cap to be lifted. Some of the reasons they give is that it will free up the credit and banks will agree to give loans (at exorbitant rates) to Wanjiku.
To me this is surrendering to a greedy bully.
Wembe ni ule ule if Uhuru v Raila is repeated next month, September 2019. Raila was never and will never be an option
this money was freely flowing with high interest rates. i think Kenyans would prefer high rate free flowing cash than low rate stagnant cash. Banks have increased their cash-in-bank holdings to 620b. imagine what that money can do if it was walking around ikisalimiana na watu…