NAIROBI, Kenya
CfC Stanbic Bank has reduced its base lending rate from 16% to 13.5% with effect from 1st August 2013. This is in response to the Central Bank of Kenya’s loose monetary policy stance signaling an era of cheap loans.
CfC Stanbic noted that stability in the macro-economic environment – specifically the outlook on inflation – partly informed its decision to cut the lending rate. Inflation is projected to remain within 5-7% range over the medium term due to prudent monetary policy and weaker commodity prices globally.
The bank added that the recent drop in Treasury bill rates was largely driven by reduced appetite from the government as the 2012/2013 fiscal year came to a close. This reduced the amount of T-bills offered, pushing interest rates lower.
Having been formed in June 2008 out of a deal that brought together Stanbic Bank Kenya Limited and CFC Bank Limited, the CFC Stanbic Bank has emerged as one of the largest banks in Kenya by assets. In its first quarter of the year, CfC Stanbic Bank posted a 78.1% jump in net profit in May this year, making it the fastest growing bank among top tier lenders.
Profits for three months to March this year was Kshs1.01billion compared to KShs568million in similar period last year. Also, Standard Chartered Bank Kenya (SCBK) announced 15.9% interest on personal loans, mortgage bundles at 12.9% and auto loans at 14.9%.
The Central Bank sent indications of loosening the monetary policy when it reduced its lending rates. Despite the rate cut by CfC to the 13.5%, this is way too far from the Central Banks standard rate which has dropped from a high of 18% to the current 8.5%.
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