CBK Announces More Mergers In Kenya’s Banking Sector

The Central Bank of Kenya (CBK) Governor Patrick Njoroge announced yesterday, September 24^th, 2019, during a conference in Nairobi that the country should expect to witness more mergers of firms, especially in the banking sector.

He said that for banking it is necessary to consolidate so that the weaker lenders are acquired by stronger lenders in the sector.

Just recently the National Bank of Kenya (NBK) was faced with liquidity problems that forced its closure and acquittance by the Kenya Commercial Bank (KCB) group.

During his media briefing, the CBK Governor made it clear that the mergers are far from over as the Competition Authority of Kenya has reportedly proposed that the Commercial Bank of Africa (CBA) and NIC Group merge as agreed by stakeholders from both organizations.

Mr. Njoroge also said that CBK would loosen its monetary policy if the government, that has been accused of ‘over-borrowing’ and increasing public debt, keeps its promise on cutting a gaping budget deficit.

“The treasury is setting fiscal deficits each financial year and if this continues to happen, we shall have a scope of monetary accommodation,” said Mr. Njoroge.

According to CBK, if the government upholds its efforts on reducing the public debt it will give managers of the economy an easier time to deal with economical crises in case there will be any.

Mr. Njoroge also addressed the issue of inflation saying that it was well managed and that the rise in the price of fuel that was definitely caused by the recent Saudi attack would not have such a significant impact on inflation.

On the bright side, the CBK Governor said that they expect that the economy will improve this financial year, owing to the good performance witnessed in the tourism sector.

“We are hopeful that our economy will grow by at least six percent given that tourism, which is our country’s major currency earner has recorded remarkable performance,” he said.

“Meanwhile, as we wait to review our economy’s growth forecast, let us be aware that there will be risks involved as the external sector is changing and is likely to affect the global economy,” added Mr. Njoroge particularly referring to the US-China trade war.

Read Also: Mergers and Acquisitions that Will Shape Kenya’s Economy in 2019