East Africa’s top banks have proved their resilience by surviving a hostile operating environment in 2019 to be ranked among the world’s 1,000 best lenders. The Banks posted stronger growth while cushioning themselves against further shocks. The Report from ‘The Banker’ owned by the London based Financial Times Ltd, stated that global Banks faced tighter regulations, high capital requirements, competition from financial technology firms and low-interest rates in Europe and the US which made earnings and banking profit difficult to sustain. However, retail banks such as KCB, Equity, Diamond Trust Bank and Co-operative Bank, remained resilient in a tough operating environment recording higher profit. Their balance sheets also showed significant improvement increasing their Tier 1 capital in line with the Basel III requirements. KCB which is present in Kenya, Tanzania, Uganda, Rwanda, Burundi, and South Sudan climbed to 717 from 809 position last year. It recorded a 17.87 percent growth in profitability and increased its Tier 1 Capital by 30.71 percent to $1.07 billion. Habil Olaka, chief executive Kenya Bankers Association observed that the Banks are taking advantage of opportunities in the EAC and providing their regional customers with seamless service delivery
According to the magazine, diminishing banking assets in Europe and Central Asia, declining profits everywhere and an uncertain economic environment, paint a grim picture of the global banking industry’s prospects. The Key Parameters for the ranking included profitability, Tier 1 Capital, Assets, Return on Assets, non-performing loans ratio, total loans to assets ratio and profit on capital ratio. Chinese banks won the top four positions.
