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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Kenyan-owned banks edge foreign
counterparts from market domination

NAIROBI (Xinhua) -- Kenya’s locally owned banks have edged their foreign-owned counterparts in market domination due to the support from local growing middle class and expanding corporate institutions, an official said Tuesday.

Adan Mohamed, cabinet secretary for industry, trade and cooperatives and the former Chief Executive Officer of the foreigner-owned Barclays Bank Kenya, also attributed the market domination to local knowledge issues, with locals able to develop products that most suit the needs of their core customers.

“Local banks have also been able to tailor their products to the needs of their customers because being local, they have a better understanding of the kind of financial solutions they require,” Mohamed told investors in Nairobi.

“There are several factors that have made local banks emerge top. We have a growing middle class in Kenya which is now banking more. We also have realized rise of local corporates and government institutions which prefer to work with local financial institutions,” said Mohamed.

Kenya’s growing middle class is boosting retail banking and products such as mortgages and personal loans and is likely to continue to drive adoption of credit cards, which have high penetration among high net-worth customers, according to analysis by consulting firm Oxford Business Group.

Data from Central Bank of Kenya (CBK), which was released last year, shows that top three dominant banks are all local.

It puts KCB Bank as the largest bank in Kenya with an asset base of 4.8 billion U.S. dollars and 3.3 billion dollars in loans.

The second ranked bank is Equity Bank with 3.8 billion dollars in assets and a loan portfolio of 3.3 billion dollars.

Cooperative Bank, which operates as the banker for savings and credit societies in the country is ranked as the third bank by the CBK.

Its core shareholders are mostly small-scale farmers who are members of the cooperative societies. It has an asset base of 3.5 billion dollars.

The top foreign-owned banks in Kenya are Standard Chartered and Barclays Kenya with an equal asset base of 2.6 billion dollars, data from the CBK shows.

A survey done last year by consulting group PwC shows local Kenyan-owned banks Equity and KCB dominate the large cross-border banking group in terms of size and subsidiaries with each having a presence in six and seven countries respectively.

PwC said this growth has made Kenya the largest beneficiary of the share of intra-Sub Sahara Africa trade.

             

 

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