NAIROBI, Kenya, Mar 14 – The full impact of interest rates capping will be realised starting June 2017, according to the Kenyan Bankers Association.
CEO Habil Olaka however says there are already indications of negative impact on the law which came into effect in August last year.
Some of the indicators include recent layoffs announcements, branch closures as well as bank mergers.
He says most banks have been forced to change their business models a move that has also hit on their full year performances.
The Banking (Amendment) Law, 2015 was approved by President Uhuru Kenyatta in efforts to reduce the cost of credit to borrowers.
Banks that have already released their results have either dropped in performance or remained flat.
NIC Bank 2016 profits took a 3.5pc hit on increased loan loss provisions while KCB Group net profits remained flat compared to 2015.
Stanbic Bank also posted a 10 percent decline in net profit in the same period.