The Kenyan Banking scene has been characterized by a poor
operating economic environment and poor macro-economic policies.
Others factors include poor supervision by the regulatory
body (Central Bank of Kenya), a bureaucratic judicial process,
poor debt culture and political uncertainty all contributed
to weakening the banking industry.
The low profitability of the industry is attributed to
the poor performance of the three of the top six banks,
including Kenya Commercial Bank, Co-operative Bank and National
Bank. On the regulatory front great strides were made as
well. All registered Banks in Kenya are now required to
publish unaudited quarterly disclosure statements that include
a range of financial and prudential information. A key part
of these statements is the disclosure of the banks¹
capital adequacy ratios. With regards to disclosure when
a registered bank falls below the minimum requirements it
must present a plan to the Central Bank aimed at restoring
capital adequacy ratios to at least the minimum level required.
The Kenyan banking sector has a ways to go in its long-term
finance and financial service product offerings. It is true
that there have been significant developments in the range
of products and services. This has raised the questions
as to whether performance is in any way linked to ownership,
and the efficiency of the foreign banks in the region.
Kenya
