5 Top-Performing Kenyan Banks in the First Quarter of 2021

Last year was a very tough year for most businesses and banks were no exception. Many Kenyans were either laid off or placed on unpaid leave. Because of this, many were unable to repay their loans.

Also, the Central bank of Kenya stepped in with measures to protect the economy. One of these measures forced banks to restructure the loans of people who were unable to repay. This denied banks one of their biggest sources of profits; the interest earned from the loans.

To adapt to the new tough environment, banks had to take measures of their own to reduce losses. These included reducing the number of branches, streamlining operations, reducing lending, focusing on increasing their net income, etc

And in the first quarter of 2021, these measures have paid off with some banks reporting a very strong performance.

The 5 top-performing Kenyan banks

NCBA Bank

NCBA bank’s reported a net profit of KSh 2.84 billion, which is a 74% increase from the KSh 1.6 billion posted the same time in the previous year.

This strong performance was attributed to an 11% rise in customer deposits to KSh 432.2 billion from KSh 389.4 billion a year ago and a 20% growth in net interest income.

Equity Bank

Equity Group reported a 63% increase in net profit from KSh 5.3 billion to KSh 8.6 billion. The bank’s interest income rose by 32% to KSh 20.3 billion from KSh 15.4 billion.

Stanbic Bank Kenya

Stanbic Bank Kenya reported a 26.7% rise in profits of Ksh 1.9 billion shillings from Ksh 1.5 billion shillings from the same time the previous year.

The bank’s operating income increased to KSh 6 billion from KSh 5.4 billion, pushed up by a 21.7% hike in non-interest funded income.

Absa Bank

Absa Kenya Group net profit rose to KSh 2.42 billion compared to KSh 1.96 billion in the same period last year, an increase of 24%.

Absa’s net interest income rose by 6% to KSh 5.96 billion in line with increased lending as the loan book expanded by 7.5% to KSh 218.3 billion.

The bank increased loan loss provisions from Ksh 1.1 billion to Ksh 1.4 billion

Standard Chartered Bank Kenya

Standard Chartered’s net profit rose 18.9% to KSh 2.4 billion compared to KSh 2 billion in the same period last year.

The growth which rose to pre-Covid-19 levels of 2019 is also attributed to a cut on operational expenses. These include cutting down the number of branches and staff as it shifts its attention to offering more digital services.

What this means for you

Banks have some of the most traded shares on the Nairobi Securities Exchange (NSE). If you are looking to buy shares especially for dividends, then these are some of the banks that you need to watch out for.

If you don’t know much about trading in shares in the NSE or you want to know how to start, read this article I wrote to help you get started.