This archive report was first published on 24 September 2021.
Despite the COVID-19 pandemic, Kenyan banks have demonstrated resilience by adopting digitalization and increasing customer deposits. As revealed by Deloitte in their East Africa Banking Industry Trends 2021/2022 publication, customer deposits rose by 8.9% from USD 34.3 billion in 2019 to USD 37.3 billion in 2020.
According to the report, which was released on September 24, 2021, the first quarter of 2021 saw a further increase in customer deposits, reaching USD 38.8 billion. This growth in customer deposits is a testament to the banks' efforts to remain relevant and adapt to the changing economic landscape.
However, the report noted that gross loans and advances remained low compared to the growth in customer deposits. Nevertheless, it is expected that given the stable macro-economic environment and increasing customer deposits, banks will increase lending in the future.
As businesses faced a downtime in operations due to the pandemic, banks experienced a reduction in client transactions and amounts in bank collection accounts. In response, most banks diversified their income streams by offering additional services such as bancassurance, letters of credit and guarantee, agency banking, and custodial and merchant services.
Timothy Machira, Deloitte East Africa Financial Institutions Services Team Senior Manager, urged banking institutions to take advantage of the opportunities that arise from economic shocks and plan for financial and operational challenges.
