Why Kenyan Banks are recording huge profits in a tough economy
Many Kenyan banks have reported huge profits for the year 2021, despite many citizens complaining that the economy is not performing well.
During the Covid-19 period, a lot of restructuring happened to cushion banks from increase NPL provisions, which was improving loan book quality by re-engineering.
CBK Governor Patrick NjorogeCBK Governor Patrick Njoroge Pulse Live Kenya
However, despite the huge profits, Kenya’s stock market has remained relatively low performing.
It is expected that after announcing payments of dividends, they would be more movement of shares at the Nairobi Stock Exchange.
Six tier one banks have announced payouts but their share prices have registered movements of between -1.3 per cent and 1.6 per cent.
NSE CEO Geoffrey Odundo monitors daily trading Pulse Live Kenya
“The Russia-Ukraine conflict, elevated global inflation and depreciating local currency have created a depressed investing environment. Subsequently, foreign investors have exited emerging markets leaving behind attractive dividends. Local investors seem to be disappointed with the dividends as they expected more,” economics analyst Solomon Kariuki told Business Daily.