Kenya’s largest bank by assets, KCB, has recorded a profit dip in the first quarter of 2017.
The bank posted a net profit of Sh. 4.54 billion in the three months to March 2017 compared to Sh. 4.63 billion in quarter one last year.
The 1.9 per cent decline came as interest rates, a tough economic environment and hyperinflation in Sudan started taking toll on Kenya’s largest lender by asset base. The drop in profitability came despite a 14 per cent increase in the uptake of loans.
“We have witnessed an increasingly challenging operating environment across all markets. In Kenya, the interest rate caps have made it difficult to price for risk whereas some of our subsidiaries are experiencing high inflation and shortage of foreign currency,” said KCB CEO Joshua Oigara.
He added that the effects of the law capping interest rates resulted in an interest income dip of 12 per cent during the quarter under review to Sh14.1 billion, down from Sh16.0 billion last year.