The value of Kenyans’ deposits held in banking institutions increased by 11 percent to hit an all-time high of Kes4.5 trillion in the period ended December 2021.
Latest data from the Central Bank of Kenya (CBK) attributes the growth in deposits to banks’ stepping up their efforts to strengthen their liquidity ratios.
“Customer deposits increased by 11 percent from Kes4 trillion in 2020, to Kes4.5 trillion in 2021,” said the CBK in the latest banking supervision report. “The growth in deposits was due to deposit mobilization through agency banking and mobile phone platforms.”
According to the CBK, the sector recorded a 75.8 percent increase in pre-tax profit to Kes197 billion in December 2021 from Kes112 billion a year earlier.
The increase was largely supported by the expansion in the lenders’ credit portfolio, investment in government securities, commissions, and earnings from foreign exchange trading.
The value of gross loans recorded an 8.3 percent jump to Kes3.2 trillion last year from Kes3 trillion in December 2020 with the regulator citing increased demand for credit across industries.
“The ratio of non-performing loans declined from 14.5 percent in December 2020 to 14.1 percent in December 2021,” noted the CBK. “The marginal decline was mainly attributable to recovery efforts by banks as well as the country experiencing recovery from the COVID-19 pandemic.”
CBK said the sector is projected to maintain its growth momentum leveraging on the gains of the economic rebound.
“Banks will continue redefining their business models to support increased digitalisation as well as keeping customers’ needs at the centre of their business ecosystems,” stated the regulator in the report.
Commercial banks in the country have until Thursday, 30th June, to submit to the CBK a policy for integrating climate-related and environmental risks into their business strategy.
“Commercial banks are therefore expected to develop and submit to CBK a time-bound implementation plan of guidance on climate-related risk management by June 30, 2022,” added the CBK. “The implementation plan should be approved by the commercial bank’s board.”