The Kenya financial sector is remains sound and resilient, supported by strong macroeconomic fundamentals says Central Bank of Kenya Governor Dr. Patrick Njoroge despite some difficulties witnessed last year culminating in the placement under receivership of three banks (Dubai Bank, Imperial Bank, and Chase Bank).
At a minimum, the names, shareholding levels, composition of local and foreign ownership as well as group structures, for banking groups, should be disclosed.
Second, stronger governance with clearly demarcated responsibilities. It is only when all stakeholders of banks (shareholders, board of directors, management and external auditors) play their roles effectively that the performance of banks will continue on a positive trend. CBK has, therefore, insisted on clear demarcation of roles among bank stakeholders. It has been strengthening its supervisory practices, including off-site surveillance, to ensure that banks practise effective corporate governance.
Third, encouraging effective business models. Continued resilience of banks can only be realised when they have sound business models. The business models should be strengthened to accommodate new business lines and innovations. This informs the drive by CBK to ensure that they maintain sufficient capital to cater for existing and potential risks and their market niche. This informed the introduction of a 2.5 per cent capital conservation buffer effective January 2015.