The Kenya Commercial Bank has retained a positive outlook despite a challenging market environment and increased regulation policing the banking sector.
Major regulations emanate from the Financial Markets Conduct Bill, the CBK Charter, and the rate capping law.
In the 2018 Finance Bill, the excise tax on fees charged for financial transactions including ATM withdrawals, depositing a banker’s cheque and over-the-counter withdrawals have been doubled from 10 percent to 20 percent which may discourage reliance on bank transfers and withdrawals.
There is also the International Financial Reporting Standard (IFRS9) and the Nairobi International Financial Centre.
The lenders at the same time have to contend with the CBK Prudential Guidelines, Proceeds of Crime and Anti-money Laundering Regulations of 2013, CBK’s Additional Guidelines to Large Cash Transactions of 2016 and the new Kenya Bankers Association rules 2018.
According to S&P Global Ratings, KCB Bank Kenya has retained the ratings of B+/B in the long and short-term, reinforcing the lender’s market leadership position.
“We believe that KCB Bank Kenya, notably its earnings position, is well positioned to withstand regulatory headwinds in Kenya and challenging economic conditions in some East African countries where the group operates,” the ratings agency said in its latest update.
S&P expects that the bank’s business and financial profiles will remain broadly unchanged over the next 12 months.
KCB Group Plc profit after tax for the first six months of 2018 surged to Sh12.1 billion representing 18 percent growth and reinforcing the lender’s solid growth prospects.
KCB operations are concentrated in Kenya and the bank has a regional presence across the East African region— Burundi, Rwanda, South Sudan, Tanzania, Uganda and a representative office in Ethiopia.