Bank investors face dividend squeeze in CBK capital plan

The Central Bank of Kenya in Nairobi.

Photo credit: File | Nation Media Group

Big banks face a reduced headroom for paying hefty dividends to investors as the Central Bank of Kenya (CBK) pushes for enhanced core capital, which is used to absorb unexpected financial losses.

New proposals by the CBK require large lenders such as Equity, KCB and Co-op Bank to hold larger buffers to prevent them from falling into trouble and disrupting the economy or requiring a taxpayer-funded bailout.

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