Time Kenyan Banks Made ‘Down Payment’ on Rates, Njoroge Says

Time Kenyan Banks Made ‘Down Payment’ on Rates, Njoroge Says

NAIROBI, Kenya, Capital Markets in Africa: Kenyan banks need to lower their “remarkably high” interest rates and make a “credible down payment” to borrowers, central bank Governor Patrick Njoroge said. While a proposed law limiting how much lenders can charge for loans is misguided, banks still need to do more to cut their rates so the benefits of a well-functioning financial system reaches customers, he said in a statement published on the central bank’s website. Lawmakers in…

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Kenya Bank Profits Drop First Time in 16 Years on Costs

Kenya Bank Profits Drop First Time in 16 Years on Costs

NAIROBI, Kenya, Capital Markets in Africa: Kenya’s banking industry last year recorded the first decline in profit since 1999 as costs outpaced income in the wake of two failures and more onerous regulations. Pretax profit across the sector declined 5 percent to 134 billion shillings ($1.3 billion) in the 12 months through December, according to the central bank’s Bank Supervision Report, released in the capital, Nairobi, on Tuesday. That came as a 16 percent increase in…

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Kenya Leads in Mobile Remittances Globally, WorldRemit Says

Kenya Leads in Mobile Remittances Globally, WorldRemit Says

NAIROBI, Kenya, Capital Markets in Africa: Kenyans living abroad sent one million mobile-phone money transactions through transfer company WorldRemit over the past five years, the most of 50 nations where the services are used. Remittances are the leading source of foreign exchange in East Africa’s biggest economy and hit a record of $156.1 million in June from $146.8 million in the previous month, according to Central Bank of Kenya data. London-based WorldRemit processes 450,000 transactions every month, 50,000 of them transfers to Kenya, the…

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Kenyan Banks Seen Resisting Lower Loan Costs After Rate Cut

Kenyan Banks Seen Resisting Lower Loan Costs After Rate Cut

NAIROBI, Kenya, Capital Markets in Africa: The Central Bank of Kenya’s reduction of the benchmark rate used by lenders to set borrowing costs may have caught commercial banks by surprise but they may find ways to dodge lowering lending rates. “Which bank would want to lend at a lower rate, taking more risk for lower returns?” Faith Atiti, a research analyst at Commercial Bank of Africa Ltd., said by phone from Nairobi. Banks will probably increase premiums and…

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Kenyan Expresses Interest in Buying Troubled Congo Lender

Kenyan Expresses Interest in Buying Troubled Congo Lender

NAIROBI, Kenya, Capital Markets in Africa: Commercial Bank of Africa Limited, Kenya’s largest closely held lender, expressed an interest in buying struggling Democratic Republic Congo lender Banque Internationale Pour l’Afrique au Congo. Commercial Bank of Africa sent a letter that was signed by the Nairobi-based company’s Group Managing Director Isaac Awuondo and dated June 30 to Congo’s central bank saying it was interested in expanding its footprint into the country by investing in the recapitalization of BIAC, according to a…

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Kenya Pauses Monetary Easing, Sees Moderate Inflation Pressure

Kenya Pauses Monetary Easing, Sees Moderate Inflation Pressure

NAIROBI, Kenya, Capital Markets in Africa: The Central Bank of Kenya maintained its benchmark interest rate at 10.5 percent with an eye on accelerating inflation and concerns that Britain’s exit from the European Union may trigger capital flight. The decision by the monetary policy committee led by Governor Patrick Njoroge was anticipated by seven of eight analysts surveyed by Bloomberg. One economist predicted a 50 basis point reduction at Monday’s meeting, following one percentage point cut at the previous gathering in…

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Kenya | Shakeout Looms for Kenyan Insurers Squeezed by Capital Rules

Kenya | Shakeout Looms for Kenyan Insurers Squeezed by Capital Rules

NAIROBI, Capital Markets in Africa: A push by Kenyan regulators to clean up the East African country’s insurance industry is poised to trigger stake sales or exits by underwriters unable to meet the new capital requirements, according to an industry group. Most companies missed a June deadline to start building capital levels over the next three years, leaving many of them stuck with having to find investors to raise cash or to sell their companies completely, Association…

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