This archive report was first published on 5 May 2021.
Published on May 5, 2021, the Central Bank of Kenya's Credit Officer Survey report for the quarter ended March 31, 2021, has issued an alert that the level of non-performing loans in the banking industry is expected to rise in the second quarter of 2021.
According to the survey, 53% of respondents expect the level of non-performing loans to rise in the period to June this year due to the continued COVID-19 pandemic and associated containment measures.
The pandemic is expected to negatively affect virtually all economic sectors, leading to a surge in non-performing loans.
Kenya's banking industry balance sheet size increased by 2.0% to KSh 5.5 Trillion in March 2021 from KSh 5.4 Trillion in December 2020.
Loans to Customers in Q1 2021 ¶
Total credit to bank customers increased by 1.4% from KSh 2,999.47 billion in December 2020 to KSh 3,040.45 billion in Q1, 2021, with a surge in loan uptake witnessed in the Financial Services and Energy and Water sectors.
However, the industry's asset quality, measured by gross non-performing loans to gross loans ratio, deteriorated from 14.1% in December 2020 to 14.6% in March 2021.
Quarterly pre-tax profit increased by KSh22.3 billion from KSh23.6 billion in December 2020 to KSh 45.9 billion in March 2021 as banks engaged in cost-cutting measures.
