Prime Bank Records 9 Percent Profit Fall in Third Quatre

Prime Bank has recorded a fall in net profits by 9.3 percent in its third quarter that ended September 2016 and for the first time since the capping of the Interests by the new law.

The lender recorded 1.37 billion shillings in earnings from 1.5 billion shillings recorded last year at the same time putting on the spotlight the small and medium banks which seem to be on the receiving end of the new interest rates law.

The drop-in profits for Prime Bank came a day after another lender, Victoria Commercial Bank posted a drop of 27.1 percent in earnings to 429 million shillings for the nine-month period ended September 2016.

Other commercial banks that have released their results are Kenya Commercial Bank and the Equity Bank Group which posted positive results despite the storm that has been brought by the interest cap law.

Small banks are feeling more heat as compared to the tier one banks. Many small and medium banks have opted to asking their employees to voluntarily retire or retrench them with the latest being First Community Bank which has announced to let go an undisclosed number of employees in the next one week.

“Over the past three months, the board and myself have been closely monitoring our implementation of the transformational agenda and we have concluded that operational costs need to be further reduced. Unfortunately, this means that the bank will have to reduce staff costs going forward” said part of the statement from the CEO Fazal M. Saib of First Community Bank.

The banking sector in the country appears to have taken a different turn with banks turning to investing more in mobile banking platforms as opposed to the over the counter transactions. Equity Bank Group is one such bank that has heavily invested in mobile banking with the lender announcing that it had let go more than 400 employees.