Bank Assets Dip After Two Decades

Hello! It's Brian from The Kenyan Wall Street with the latest edition of our daily newsletter. Below are our stories for the day…

ANALYSIS  

Bank Assets Dip After Two Decades

For the first time in 20 years, Kenyan banks' assets shrank, dropping by KSh 335 billion in 2024, breaking a long streak of growth fueled by digital banking and regional expansion. KCB Group led the plunge, shedding KSh 208.6 billion, with reduced customer loans and foreign deposits weighing it down. Other major banks like NCBA (-KSh 68.7B), DTB (-KSh 61.9B), and Standard Chartered (-KSh 44.4B) also saw declines, hit by tighter credit conditions.

Meanwhile, Co-operative Bank swam against the tide, growing by KSh 72.1 billion (+10.74%), making it the third-largest bank in Kenya. HF Group (+13.97%) and I&M Group (+0.27%) also managed to squeeze out gains. High interest rates (CBR at 13%) and surging non-performing loans (NPLs at 16.5%) made 2024 a tough ride for banks and borrowers alike. Here is a detailed analysis»»»»»

Today's Poll

March Inflation Hits 6-Month High

Kenya's inflation rate increased for the fifth consecutive month, reaching 3.6% in March, up from 3.5% in February, driven by higher food and non-alcoholic beverage prices. Key contributors to inflation include a rise in the costs of sukuma wiki, potatoes, and maize. The transport index also saw a 1.5% increase due to higher local flight prices, while fuel prices remained stable. The Central Bank of Kenya's survey highlights optimism in business activity, supported by favorable weather, stable macroeconomics, and lower global oil prices. Real GDP growth for 2025 is projected at 5.4%, bolstered by agriculture and key service sectors. Here is more»»»»»

Tullow Oil Stuck in Regulatory Limbo

Tullow Oil’s Kenyan oil project is in trouble after its partners ditched the venture, leaving the company to face a slow-moving regulatory process alone. The Energy and Petroleum Regulatory Authority (EPRA) has extended its review of Tullow’s Field Development Plan until June 30, 2025, delaying any production license. Without a new investor, Tullow risks writing off even more of its already impaired $145.4 million investment—because, apparently, oil and patience don’t mix well. Price volatility is another headache, as a $5 per barrel swing could mean an $18.5 million shift in valuations. The Kenyan government remains interested, but shifting global energy trends and bureaucracy aren’t making things easy. If Tullow cracks the code, the project could reverse impairments of up to $1.075 billion—but for now, it's a waiting game with high stakes.

The Latest on Trade and Commerce…

• US companies have highlighted their limited success bidding on government tenders, citing corruption and initiatives such as the ‘Buy Kenya Build Kenya’ as reasons, according to the 2025 National Trade Estimate Report on Foreign Trade Barriers. Here is the full report »»»»»»

• In January 2025, Uganda, Pakistan, and the Netherlands were Kenya’s leading export destinations, with export values of KSh 9.8 billion, KSh 6.7 billion, and KSh 5.9 billion, respectively. Here is how our trade position looks like»»»»»

On your watchlist

Also Read

• Companies. Global security solutions provider GardaWorld Security has rebranded its Kenyan subsidiary—KK Security Ltd— to GardaWorld Security–Africa.

• Finance. As businesses strive to expand their reach beyond borders, a reliable financial partner to navigate these complexities effectively and adopt proactive forex management strategies is a needful requirement. Here is how SBM Bank intends to solve this»»»»»

• Real Estate. The value of building plans approved in the Kenyan capital saw a steep 27.5% decline to KSh 10.17 billion in January 2025 from KSh 14.02 billion in January 2024.

Yesterday's Poll Results 

What do you think is the cause for the slow down in building and construction?