Kenyan Banks pre-tax profits for the seven months to July jumped 53.2 percent and surpassed last year’s full-year earnings.
This points to continued recovery from the Covid-19 menace with customers stepping up loan repayments.
Latest Central Bank of Kenya (CBK) data shows pre-tax earnings in the seven months hit Sh113.4 billion.
This is to race ahead of the Sh112.8 billion posted in the full year ended December 2020 according to Business Daily.
Kenyan Banks Performance
The jump came in a period when banks increased lending and cut the size of non-performing loans (NPLs).
This is further due to a rise in repayments and property auctions.
The latest profit translates to a 53.2 percent jump from the Sh74 billion profit that lenders returned in seven months last year when Kenya imposed Covid-19 restrictions.
The slowed lending cut lenders’ profits 29.5 percent.
This was moreover linked to reduced economic activity after Kenya’s first Covid-19 case in March 2020.
It was moreover linked to mounting defaults or provisions
The easing of restrictions and rollout of Covid-19 vaccines this year has however triggered a gradual recovery in the economy.
This has further prompted banks to boost lending amid repayment of defaulted loans.
NPLs have dropped for the fifth consecutive month to close July at Sh433.3 billion from a peak of Sh444.2 billion in February, offering a reprieve to lenders.
The fall in bad loans has seen the proportion of NPLs to the sector’s loan book fall to 13.8 percent — the lowest in nine months.
It was at 13.6 percent last October.
Banks have expanded the loan book by Sh310.3 billion or 7.2 percent to Sh4.332 trillion between January-July, buoyed by falling loan defaults.
Kenyan Banks Foreign currency deposits eased by Sh2.6 billion in July, signaling rising usage by importers, who had raised their holdings in June.
The value of the hard currency deposits stood at Sh757.73 billion at the end of July down from Sh760.34 billion in June.
This is according to Kenya National Bureau of Statistics (KNBS) data.