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Add to Banking Sector As Kenyans Deposit Ksh4.1 Trillion In Three Months –

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The Bank of Kenya’s sector recorded growth in the quarter ended March 31, 2021, compared to
the quarter ended December 31, 2020, a study conducted by the Central Bank of Kenya (CBK) has shown.

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Total deposits increased by 2.8 percent from Ksh4.021 trillion in December 2020 to
Ksh4.133 trillion in March 2021.

The total table increased by 2% to Ksh5.5 trillion in March 2021
from Ksh5.4 trillion in December 2020.

Total loans increased by 1.4 percent from Ksh2.999 trillion in December 2020 to
Ksh3.040 trillion March 2021. Growth in total loans was mainly due to the increase
advances in financial services, and energy and water sectors.

Read: CBK Nods for Dismissal of a Fallen Bank When Recovery Efforts Fail

Asset quality, measured by total non-performing loans in proportion to the total loan ratio decreased from 14.1 percent in December 2020 to 14.6 percent in March 2021. This was due to the decline in business activity as a result of the negative impact of the COVID -19 catastrophe.

The capital adequacy ratio declined from 19.2 percent in December 2020
up to 18.9 percent in March 2021. This is as a result of a minimum increase in total capital (1 percent) as
compared to the total increase in risky assets (2.7 percent). Balance of capital adequacy
reported in the two periods were above the lower legal limit of 14.5 percent.

Quarterly pre-tax profits increased by Ksh22.3 billion from Ksh23.6 billion in December 2020 to Ksh45.9 billion in March 2021. This was due to a significant decrease in cost (22.8 billion
percentage) compared to declining income (4.6 percent). Return to Property has increased to
2.7 percent in March 2021 from 1.6 percent in December 2020.

Read: KRA Denies Ksh4.4 Billion Paid Paid to Owners of Westgate Center Owners

Return to Equity increased from 13.8 percent in December 2020 to 22.0 percent in March 2021.
This is as a result of a significant increase in the quarterly pre-tax profits (94.7 percent) than the overall increase in shareholder funds (2.4 percent).

At the end of the quarter ended March 2021, liquidity in the banking sector increased from 54.6
percent in December 2020 to 56.3 percent in March 2021. This was higher than the low legal ratio of 20 percent.

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