BANKS GROW RICH AS KENYANS STAY POOR

Strong growth by the banking industry over the last 10 years has not been matched by a lowering of poverty levels in the country.

The industry’s total assets, a key growth indicator, grew from Sh328 billion in 1997 to Sh746 billion in 2006, a 127 per cent rise, according to a banking survey released yesterday in Nairobi. Over the same period, poverty levels remained high, with about 50 per cent of Kenyans living below the poverty line.

“Although the banking sector has played a key role in financing agriculture, the mainstay of the country’s economy, the funding has either been insufficient or not reached the peasant farmers in the rural areas,” said Mr Ochieng Oloo, the chief executive of the study’s publishers, Think Business magazine, during the launch. Mr Oloo said the collapse of the Government-owned Agricultural Finance Corporation (AFC) did not help matters.

Think Business, formerly known as Market Intelligence, studied 42 banks, and says the sector is experiencing robust growth. Deposits in the sector grew, from Sh247 billion in 1997 to Sh610 billion last year, representing a 146 per cent growth.

Only two banks made losses — City Finance Bank and Oriental Commercial Bank. Unlike the previous surveys, the 2007 report classified and ranked the banks into three separate tiers according to their balance sheets. In Tier 1, Citibank Kenya (72 points) leads for the second year running.

Standard Chartered Bank is second (96 points) followed by Stanbic Bank, (101 points) Equity Bank (117 points) and Barclays Bank (123 points). In Tier 2, which comprises of 12 banks with a balance sheet of between Sh5 billion and Sh20 billion, Habib Bank AG Zurich leads with 137 points, followed by Bank of Baroda (146 points), Bank of India (161 points). Banks in Tier 3 are led by Victoria Commercial Bank (167 points) followed by Prime Bank Capital (186 points), and Chase Bank (194 points).


SOURCE: DAILY NATION