(+) BANKS ARE RE­SPOND­ING TO RE­DUCED MAR­GINS

The Star (Kenya) - - News Business -

The Kenyan bank­ing in­dus­try has been un­der pres­sure to en­hance op­er­a­tional ef­fi­cien­cies to cut costs. Sid­ian Bank projects a 40 per cent hit on its earn­ings this fi­nan­cial year. On Septem­ber 14, NIC Bank CEO John Ga­chora said there is no ques­tion that ef­fi­ciency has to come into play, es­pe­cially with re­duced mar­gins. He, how­ever, ex­pressed op­ti­mism that in­ter­est con­trols will bring more cus­tomers to the banks – not just to bor­row but also to save. An­a­lysts have said large banks are bet­ter po­si­tioned to weather the in­ter­est caps storm due to economies of scale, build­ing a case for con­sol­i­da­tion among smaller len­ders in the near to medium term. Bri­tam chief ex­ec­u­tive of­fi­cer Ken­neth Ka­niu on Septem­ber 27 said large banks will be able to ad­just eas­ier to in­ter­est rate cap­ping rel­a­tive to smaller banks. He noted smaller banks tend to deal more with niche market which has higher risk bor­row­ers.

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