Bank margins shrink on rate capping law

A KCB banking hall in Nairobi. FILE PHOTO | SALATON NJAU | NMG

The banking sector’s return on equity (RoE) has shrunk by nearly five percentage points since June last year, reflecting the lower income banks are getting under the rate cap regime.

The lenders have consistently offered one of the highest returns per shilling invested, helped by large spreads between interest earnings and cost of funds.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.