Foreign Branches of Kenyan banks Post Double Profits

{{Foreign subsidiaries of Kenyan banks more than doubled their profits in the year ended December, underlining the importance of the units to the lenders’ bottom lines.}}

Kenyan banks, led by Equity and KCB, had opened 282 branches in the region as at December up from 223 in 2011.

According to statistics from the central Bank of Kenya (CBK) noted,the growth was driven by earnings from South Sudan, which mainly are forex dealings and transition incomes since the market accounted for nine per cent of the loans held by the subsidiaries.

“Subsidiaries operating in South Sudan accounted for 47% of the total profits followed by Tanzania at 31%, Uganda 12.5%, and Rwanda 9.6%,’’ said CBK in its latest industry report.

Kenyan banks have increasingly focused on Uganda, which had 125 branches of the subsidiaries last year. South Sudan had 31 branches.

Analysts in the banking sector note that fees and commissions from forex trading and other non-lending activities were the main drivers of profitability in South Sudan.

The country relies heavily on imports, creating a huge demand for forex dealers led by the banks.