The pre-tax profit of Kenyan banks jumped 18.8 percent in the first two months of the year on increased lending and reduced provisioning for bad loans.
Data from the Central Bank of Kenya (CBK) shows the pre-tax earnings stood at Sh36.1 billion in the review period, rising from Sh30.4 billion in a similar period last year.
The earnings point to even higher profits this year for the industry after record-setting earnings in the full year to December.
The banks posted Sh194.8 billion as gross profits last year compared to Sh112.8 billion in 2020, riding on reduced loan loss provisions besides higher income from lending and transactions.
The profit growth in the two-month period came as banks continued to raise their lending to the government and private sector on recovery of the economy.
Credit to government expanded by 27.5 percent or Sh383.6 billion to Sh1.78 trillion in the 12 months to February from Sh1.39 trillion in February 2021.
Growth in private sector credit increased to 9.1 percent in February to Sh3.13 trillion from 8.6 percent in December 2021.
The CBK in the Monetary Policy Committee on March 29 said strong credit growth was observed in sectors such as transport and communication (24.1 percent), manufacturing (7.6 percent), trade (8.9 percent), consumer durables (14.0 percent), and business services (11.6 percent).
“The number of loan applications and approvals remained strong, reflecting improved demand with increased economic activities,’’ the regulator said.
Easing of restrictions and rollout of Covid-19 vaccines last year have triggered a gradual recovery, boosting lending.