Kenya Commercial Bank (KCB) Group has been ranked as the most attractive bank in Kenya, supported by a strong franchise value and the essential value achiever.
The franchise score measures the comprehensive business strength of the company across 13 different metrics, and the basic score measures the investment return potential. National Bank was ranked the lowest in both the licence and central value score, according to a report by Cytonn Investments.
The 2017 Banking Sector Report, dubbed Transitioning to a more Disciplined and Efficient Sector, analysed the outcome of the listed banks in the first half of 2017 so as to establish which banks are the most attractive and stable for investment,” said Maurice Oduor, Cytonn’s Investments Manager.
Speaking at Nairobi Hotel after while releasing the report, Oduor said Cytonn Investments is seeing banks adopting a more disciplined approach, following rising non-performing loans and the capping of interest rates, while also employing cost support measures in a bid to enhance competence under the current operating environment.
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Cytonn Investment Analyst Caleb Mugendi noted that there shall be an increase in consolidation and the industry will be expected to become more stable where only the banks with a strong competitive advantage, either in capitalisation, deposit gathering shall remain firm.
“We are already witnessing increased consolidation in the banking sector, with smaller, uncompetitive banks being acquired, and the entrance of large global banks, such as Dubai Islamic Bank, and global suitors for Chase Bank,” Mugendi said.
He further cited that KCB Group was the only bank that recorded growth in Net Interest Income (NII), a 2.9%, following a 20.8% decline in interest expense consecutively, as the bank managed to contain its cost of funding. The sector has remained resilient by adopting a disciplined banking approach which will in turn shift the industry as a stable banking sector.
