This archive report was first published on 22 October 2021.
On 30th June 2021, the Central Bank of Kenya (CBK) closed its financial year with a net surplus of KSh 36.9 billion, a decline from the previous year's surplus of KSh 41.5 billion in the 2019-20 financial year.
According to the CBK's Annual Report and Financial Statements for 2020-21, the drop in net surplus is attributed to an exceptional gain of KSh 7.4 billion in the previous financial year, resulting from the demonetization of the country's currency notes and coins.
The 2020-21 surplus has been included as part of the General Reserve Fund.
On 12 February 2021, the directors recommended an exceptional transfer of operational surplus in the year to 30 June 2021 of KSh 5 billion.
Furthermore, the directors recommended a final transfer of operational surplus in the year to 30 June 2021 of KSh 5.5 billion to the Consolidated Fund, compared to KSh 2.5 billion in 2020.
CBK's operating surplus dropped to KSh 11.7 billion in the 2020-21 financial year, down from KSh 17.1 billion in 2020, due to lower rates offered on foreign deposit placements and the one-off gain on the demonetization of old currency in the prior year.
During the financial year ended 30 June 2021, CBK recorded an unrealised foreign exchange gain of KSh 25.3 billion, compared to KSh 24.5 billion in 2020, due to the strengthening of the US Dollar.
The Bank also recorded a fair value loss on fixed income securities of KSh 6.3 billion, compared to a gain of KSh 8.5 billion in 2020, as a result of a decline in market prices.
Additionally, an actuarial gain on retirement benefit asset of KSh 676 million, compared to KSh 1.9 billion in 2020, was earned.
There was an overall revaluation increase of KSh 1.3 billion on land and buildings recorded during the year in the consolidated statement of comprehensive income.
The valuation is performed every 3 years in line with the Bank's Fixed assets management policy.
CBK's Balance Sheet size grew to KSh 1,449,056 million, compared to KSh 1,350,434 million in 2020, mainly attributed to an increase in funds on-lent to the Government of Kenya from the International Monetary Fund (IMF) and net inflows from banking institutions.
Liabilities of CBK increased to KSh 1,232,562 million, compared to KSh 1,154,419 million in 2020, mainly due to loans owed to the IMF.
According to CBK Governor Dr. Patrick Njoroge, the 2020-21 financial year began against a backdrop of the global coronavirus (COVID-19) pandemic and measures taken by authorities across the world to mitigate the adverse demand and supply-side effects of the pandemic.
Dr. Njoroge observes that the Kenyan economy continues to recover from the effects of the pandemic, supported by policy measures implemented by the Government to mitigate the adverse economic and financial effects of the pandemic and gradual reopening of the economy and easing of COVID-19 restrictions.
“Looking ahead, CBK will roll out a new strategic plan to guide its activities in the next three years. At the core of the strategic plan is the maintenance of a low and stable inflation rate, continued coordination of monetary and fiscal policies to sustain macroeconomic stability and revamp the economy in the post-COVID-19 period,” said Dr. Njoroge.
