Key questions answered by the article
- How did Kenya's top banks perform in the face of economic challenges?
- What is the outlook for H2 2023?
In August, Kenya's top nine banks, ranked by asset size, unveiled their financial results for the first half of FY2023. Against the backdrop of soaring inflation rates and a depreciating currency, these financial players found themselves at the forefront of economic volatility.
In this analysis of their H1'2023 performance, we delve into three pivotal challenges posed by this inflationary environment: the impact on operational costs, the effect of rising interest rates on banks' margins, and the surge in credit risk brought about by inflation and tightening monetary policies.
Interest rates
In H1 2023, Kenyans experienced a rising cost of living due to higher inflation rates, averaging 8.5% compared to 6.3% in H1 2022. Responding to this challenge, the Monetary Policy Committee (MPC) held an emergency meeting in
