The banking sector improved marginally in the quarter ending September 30th 2015 supported by increased loans to customers. According to the third quarter banking sector report by the Central Bank of Kenya, loans and advances grew by 6.9 percent which translated to increased economic activities in various sectors of the economy.
The sector’s gross loans and advances increased from sh2.17 trillion in June 2015 to sh2.32 trillion in September 2015, translating to a growth of 6.9 percent.
The report asserts that
The Kenyan Banking Sector’s performance improved with the size of total assets standing at sh3.65 trillion, gross loans worth sh2.32 trillion, while the deposit base was sh2.57 trillion. Profit before tax of sh114.22 billion was realised for the nine months to 30 th September 2015. Over the same period, the number of bank customer deposit and loan accounts stood at 33,291,000 and 7,016,378 respectively.
The major asset components were local and foreign currency loans, government securities and placements which accounted for 61.2 percent, 17.4 percent and 5.4 percent of total assets respectively.
The quarter under review comprised 42 commercial banks, 1 mortgage finance company, 12 micro-finance banks, 8 representative offices of foreign banks, 86 foreign exchange bureaus, 14 money remittance providers and 3 credit reference bureaus.
During the period, Dubai Bank limited was placed under receivership and eventually on liquidation for failure to maintain adequate capital and liquidity ratios as well as provisions for non-performing loans and weak corporate governance structures.
Central bank is upbeat that banks will do well for the remainder of 2015. It authors that;
The Kenyan banking sector is foreseen to remain stable and maintain an upward growth trend in the remainder of 2015