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Banking sector records quarterly growth

08 May 2014, 15:38

Nairobi - The banking sector recorded marginal growth in the quarter ended March 31, compared to the last quarter ended December 21.

This is according to a report released by the Central Bank of Kenya (CBK) which states that the aggregate balance sheet (total assets) increased by 3,3 percent to KES 2.82 trillion in March 2014.

It also states that gross loans and advances grew by 5.6 percent to KES 1.69 trillion in March 2014.

“Banking sector deposits increased by 2.5 percent to KES 2.03 trillion in March 2014,” states the CBK report.

The total shareholders’ funds increased by 5.11 percent to KES 453.61 billion in March 2014 while cumulative unaudited pre-tax profits for the quarter ended March 31 stood at KES 33.4 billion compared to KES 28.2 billion for the quarter ended March 31.

Apart from the sector performance the report also did a credit officer survey.

It found that lending is the principal business activity for most banks and as a result credit risk is the single largest factor affecting the soundness of banks and the financial system as a whole.

In the quarter ended 31st March 2014, the CBK report shows that the ratio of total loans to total assets for the Kenyan banking sector was 59.3 percent, a slight increase from 58.2 percent in the previous quarter.

CBK’s found that demand for credit generally increased, credit standards remained substantially unchanged and the credit standards were tightened marginally for the Tourism sector while credit standards for the Trade sector were eased.

“Most banks intend to intensify recovery efforts in six sectors (agriculture, building, trade, transport, real estate and personal/household sectors) to improve the overall quality of their asset portfolio while maintaining recovery efforts in the other five economic sectors,” stated the report.

 - CAJ News

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