Commercial banks earned Sh379.6 billion in profit last year
The total interest earned by commercial banks in 2018 rose by 30.7 per cent from Sh368.2 billion in 2017 to Sh379.6 billion, a new survey reveals.
This growth was mainly driven by interest from an investment in government securities which increased by 13.4 per cent in the review period.
The growth of interest income from loans and advances contracted by 1.7 per cent in 2018. Insurance activities slowed down to 5.2 per cent growth in 2018 from 6.5 per cent in 2017.
This was evident in the slowdown in the growth of gross premium income from 13.6 per cent in 2017 to 5.3 per cent in 2018.
SEE ALSO :What Kenyans saved money for in 2016 and 2019
The 2019 Economic Survey released on Thursday points to a stronger performance of the financial and insurance sector in 2018 compared to constrained growth in 2017 following the introduction capping of interest rates in 2016.
The growth realised in the period under review was mainly supported by considerable improvements in financial activities in spite of a deceleration in the growth of insurance activities.
The sector expanded by 5.6 per cent in 2018 compared to 2.8 per cent in 2017. During the review period, domestic credit rose by 4.6 per cent in 2018 compared to 8.7 per cent in 2017.
Growth of credit to the National Government was slower (13.6 per cent) in 2018 compared to 27.5 per cent in 2017.
Similarly, credit to the private sector expanded by 1.9 per cent in 2018 compared to 4.1 per cent growth in 2017.
SEE ALSO :Shopkeepers hardest hit by defaulters, mobile loan app follows
Money supply rose by 10.1 per cent in 2018 compared to 9.6 per cent growth in 2017.
Last year (2018) was a tough period for insurance and investment companies which saw their operations suffer huge losses estimated at billions of shillings.
This was attributed to lower revenues in the stocks market, real estate slowdown and lower revenues from investment in government securities. The situation was made worse by rising claim costs in the review period.
Investment firm Britam Holdings which posted an Sh2.2 billion loss in 2018, up from a profit of Sh527 million in 2017 blamed the decline on a 10 per cent occupancy of Britam towers and decline in performance at the NSE.
Kenya Reinsurance blamed lower valuations on their real estate property as occupancy was hit hard.
SEE ALSO :Do Kenya’s used car dealers really pay Sh49 billion a year in import tax?
It also experienced decline earnings from its subsidiaries. According to its report, business at ZepRe suffered forex losses in South Sudan to see net profit decline by 36 per cent, from Sh3.5 billion in 2017 to Sh2.2 billion in the 12 months to December last year.
Liberty Kenya Holdings saw after-tax earnings decline nine per cent from Sh674 million in 2017 to Sh608 million last year, blaming the decline on stunted premium growth in Kenya and Tanzania.
For the latest news in entertainment check out Sde.co.ke and Pulser.co.ke , for everything sports visit Gameyetu.co.ke and ladies we have you covered on Evewoman