The Central Bank of Kenya(CBK) recorded a net surplus of KSh 41.5 Billion compared to KSh 26.1 Billion in the financial year ended 30 June 2020.
According to its financial statements for the period ended 30th June, 2020, this surplus is included as part of the General Reserve Fund.
CBK’s operating surplus before unrealized gains was KSh 17.1 Billion compared to KSh 21 Billion in 2019.
Its interest income declined to KSh 22.3 Billion compared to KSh 23.3 Billion in 2019 due to lower rates offered on foreign deposit placements and a decline in fixed income yields respectively as a result of global monetary policy easing cycles.
The apex monetary body recorded an unrealized foreign exchange gain of KSh 24.5 Billion at the close of the period ended 30 June 2020. This is compared to KSh 5.1 Billion in 2019 due to what the Bank attributes to a strong US Dollar.
The Bank also recorded a gain on fixed income securities of KSh 8.5 Billion compared to KSh 7 Billion in the prior year.
CBK’s balance sheet size increased to KSh 1,350,434 Million(KSh 1.4 Trillion) compared to 1.2 Trillion in 2019. This growth is attributed to net inflows from development partners and changes in the value of securities maintained for monetary policy implementation.
Liabilities increased to KSh 1.2 Trillion compared to KSh 1.1 Trillion in 2019 as a result of an increase in deposits from banks and government, largely attributed to proceeds to mitigate the coronavirus pandemic.
On 20 March 2020, CBK Directors approved a transfer of KSh 7. 4 Billion to the Consolidated Fund from the General Reserve Fund. This transfer represented a one-off surplus arising from the demonetization exercise carried out by the CBK in the year. The transfer of this surplus to the Government of Kenya revenues was done to support their efforts in the COVID-19 pandemic crisis. The directors recommend a transfer of operational surplus in the year to 30 June 2020 of KSh 2.5 Billion compared to KSh 4 Billion in 2019.
CBK’s impressive financial performance is happening when four of its directors are approaching the end of their contracts. They include Mrs Nelius Kariuki, an economist who was appointed to the board on 4th November 2016. Her four-year contract expires on 3rd November, 2020.
The contract of Ravi Ruparel, a financial sector expert, also expires on 3rd November 2020 after being appointed to the CBK board on 4th November, 2016.
Samson Cherutich, an accountant and Mrs Rachel Dzombo-a management expert, will also both have their contracts ending on 4th December, 2020. Both were appointed to the board of this apex monetary body, on 5th December, 2016.
While the CBK board does not participate in the daily operations of CBK, it retains the responsibility of approving the Bank’s policies. The President appoints these non-executive board directors at CBK, with the approval of parliament, for a term of four years. These directors are eligible for re-appointment for another term of four years, provided that one does not serve for more than two terms.