Kenya’s Banking Industry Balance Sheet size stood at KSh 6.5 trillion as of December 31st 2022, corresponding to 66% of Kenya’s Gross Domestic Product(GDP) in the same period.
According to a 2023 Kenya Banking Industry Report by Agusto Market Intelligence (AMI), the Banking Industry’s growth over the past decade has been attributed to thriving mobile money systems, rising virtual banking solutions and substantial investments in technology infrastructure.
Resillience of Kenya’s Banking Industry
This report notes that the Kenya Banking Industry remains resilient despite the prevailing harsh macroeconomic conditions and plays a critical crucial role in Kenya’s economy, which is the largest in the East African region with a real Gross Domestic Product (GDP) estimated at KSh 9.9 trillion (US$ 84.1 billion) in 2022.
The report mentions that Kenya’s mobile banking space is the most vibrant of all digital services with over 73.7 million mobile money accounts.
Kenyan Banks record staff cost as their single largest expense, accounting for 47% of total operating expenses while 31% of the entire industry’s balance sheet is made up of Government securities. Banks also record forex trading income as the biggest contributor of non-interest income, pegged at 39%.
While Kenya’s Banking sector has posted significant growth, the report cites huge opportunities that are yet to be fully exploited, including the development of more sustainable financial offerings and providing new services such as bankassurance while also growing the digital banking solutions space.
The industry will have to brace itself for climate-related financial risk assessment and management as well as environmental, social and governance (ESG) appraisals by the Central Bank of Kenya (CBK), which issued guidance notes on these issues two years ago. This is in line with reporting and disclosure by banks as part of global sustainable and responsible business practices.
ALSO READ; Financial Sector Players in Kenya Join Forces to Promote Savings Culture
