East Africa’s top banks ranked among the world’s 1,000 best lenders despite tough operating environment.
The banker, a monthly London-based international financial affairs publication owned by the Financial Times Ltd, shows that Kenya Commercial Bank (KCB), Equity, Diamond Trust Bank and Co-operative Bank, remained resilient in a tough operating environment so as to maintain an upward growth in profitability.
The banks made significant strides in strengthening their balance sheets (assets) and increasing their Tier 1 capital in line with the Basel III requirements.
Tier 1 capital is the core measure of a bank’s financial strength which is reserved to ensure banking operations are not disrupted during periods when lenders make losses.
The chief executive Kenya Bankers Association, Habil Olaka said that banks are taking advantage of opportunities in the East Africa Region and providing their customers with seamless service delivery.
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KCB improved its position to 717 from 809 last year after posting a 17.87 per cent growth in profit to $332 million. It also increased its Tier 1 Capital by 30.71 per cent to $1.07 billion. KCB’s balance sheet grew by 11.96 per cent to $7.013 billion. While It’s capital assets ratio increased to 15.39 per cent from 13.18 per cent.
Its return on assets, on the other hand, stands at 3.36 per cent, non-performing loans ratio at 6.07 per cent and the loans to assets ratio at 65.83 per cent.
Equity bank ranked 844 from last year’s 799 position partly due to a decline in the level of Tier 1 capital by 8.95 per cent to $772 million. Despite this, the lender has grown its profit by 7.32 per cent to $279 million.
Equity bank increased its level of assets by 10.81 per cent to $5.63 billion, with its return on assets at 3.46 per cent, loans to assets ratio (53.31 per cent) and NPL ratio (7.85 per cent). It capital asset ratio declined from 16.7 per cent to 13.72 per cent.
Co-operative Bank ranked 950 from 951 last year, with its Tier 1 Capital increasing by 3.73 per cent to $571 million. Its total assets increased by 8.31 per cent to $4.05 billion.
It made a 12.23 per cent growth in profit to $178 million but its capital asset ratio slightly decreased to 14.08 per cent from 14.7 per cent.
DTB ranked 981 due to an increase in its Tier 1 capital by 13 per cent to $527 million. It also grew its balance sheet by 5.38 per cent to $3.7 billion while its earnings increased 10.41 per cent to $108 million.