Non-performing loans (NPLs) at leading Kenyan banks increased in 2020 as Covid-19 hit the country’s economy, following a general upward trend in bad loans in the past few years.
Equity Bank, which overtook rival KCB Group as the largest bank in the country by assets last year, saw its NPL ratio rise to 11.7% in 2020 from 9.6% in 2019. Meanwhile, KCB Group, which remains the largest lender by Tier 1 capital, also saw an increase in NPLs to 15.1% from 11.2% in 2019.
Co-operative Bank of Kenya and NCBA – the third and fourth largest banks in the country by assets – saw their NPL ratios rise to 15.3% and 15.0% respectively, according to The Banker Database.
Back in 2016, Co-operative Bank of Kenya had an NPL ratio of 4.3% and Equity Bank had an NPL ratio of 6.8%.
Kenya’s tourism sector has been badly affected by the pandemic, along with manufacturing. Despite this, the country’s economy only shrank 0.3% last year, according to the World Bank. But the economy has also been hampered by fiscal imbalances over the past few years, such as ballooning government debt, which has also had an impact on banks’ operations.
Trends identified using The Banker Database, an online database providing comprehensive financial data and insight for 4000 of the world's leading banks in 190 countries. Contact us.
