CBK gives banks 5-year reprieve to raise capital

The Central Bank of Kenya (CBK) building in Nairobi. FILE PHOTO | NMG

Kenyan banks have been given a five-year waiver from higher capital requirements in the wake of a more conservative accounting standard that took effect on January 1.

Adoption of the International Financial Reporting Standards (IFRS 9) will see banks provide for expected loan losses rather than those already incurred, reducing their profitability and eroding their capital base.

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