Kenyan banks see the risk trajectory as strengthening and have already begun clawing back some of the impairment losses they recognised in 2020. To a very large extent, the international financial reporting standard 9 (or famously referred to as IFRS 9) – the accounting wizardry on which banks recognise and measure the performance of their financial assets – took away prudence when it comes to risk judgements, by handing management of commercial banks a lot of discretion.
First, they stopped lending and instead resorted to piling liquidity elsewhere.
They are now buying more Treasury bills and bonds. At the close of the second quarter, the share of investment securities to total assets crossed 30%, which is a record high, while the share of loans and advances to customers, their core business, dropped to below 50%, from a high of 60% six years ago.
The net result of not lending, since
There's more to this story
Get unlimited access to our exclusive journalism and features today. Our award-winning team of correspondents and editors report from over 54 African countries, from Cape Town to Cairo, from Abidjan to Abuja to Addis Ababa. Africa. Unlocked.
cancel anytime
Already a a subscriber Sign In
Also in this in Depth:
pick & choose
AngoMart, Anseba, Kibabo: New supermarkets continue to flood Angola Once in the hands of those close to the clan of Angola’s former president José Eduardo dos Santos, the supermarket sector is undergoing a complete overhaul, and competition is in full swing.growth spurt
Mali, Burkina, Benin, Togo… Who are the local fertiliser leaders? While Mali’s Toguna and DPA are vying for a regional position in West Africa, several other fertiliser companies are playing their cards right.