Posted 11/27/2023, 2:40:35 AM
Banks' Profits Decline as Record Loan Defaults Reach 16-Year High
- Banks posted a rare 0.6% drop in pre-tax profits in the first 8 months of 2022 to Sh162.3 billion as loan defaults hit a record Sh611.4 billion
- The profit decline reflects economic hardships affecting borrowers and their ability to service loans
- Factors like high prices, new taxes, and rising interest rates have weakened borrowers
- Loan defaults are now at 15% of the total loan book, the highest level in 16 years
- Top banks like KCB, Equity and Co-op Bank reported single-digit profit growth as they set aside more money for potential defaults