Central Bank Kenya 2017 Profit Hits Sh 17 Billion on Stronger Shilling

During financial year ended 30 June, 2017, the Central Bank of Kenya recorded a net profit (surplus) of Sh 17.05  Billion compared to a loss of Sh 4.6 Billion in financial year ended 30 June, 2016.

The profit was mainly attributed to foreign exchange gains as the shilling was stable over the period against major currencies compared to previous year.

The bank’s annual financial results show that unrealized foreign exchange gain was Sh 8.52 Billion from a loss of Sh 19.97 Billion in 2016 on the back of a stable movement of the Kenya shilling against major currencies between the two periods. In the previous year, the shilling had weakened against major currencies hence the loss recorded.

Trading income generated from sale of foreign currency was Sh 4.3 billion compared to Sh 6.5 billion in 2016. The market was relatively stable compared to the previous year resulting in low volumes of sale of foreign currency.

Excerpts from the statement;

As at 30 June 2017, if the shilling had weakened/strengthened by 5% against the major currencies with all other variables held constant, the impact on the Bank’s profit would have been:

  • USD Shs 31,072 million (2016: Shs 23,499 million)

  • Euro Shs 8, million (2016: Shs 8,037 million)

  • British Pound Shs 4,012 million (2016: Shs 73million)

  • SDR Shs 5,662 million (2016: Shs 6,031 million)

Total interest income declined to Sh 14.4 Billion compared to the previous period’s Sh 15.9 Billion. Interest earnings on foreign reserves was Sh 7.07 billion from Shs.4.065 Billion in 2016.  Interest earned on loans and advances was Sh 7.01 Billion down from 2016’s Sh 10.86 billion. The drop is due to reduced utilization of Government of Kenya overdraft facility and also, reduced advances to commercial banks due to a relatively more stable market during the year as compared to the previous year.