The 2017 Annual Bank Supervision Report just released by CBK casts an interesting spotlight on the changing fortunes of banks as they jostle for position in a competitive market.
The banking Sector Market Share analysis has KCB retaining its position posting a market share index of 14.4%, followed by Coopbank with 9.93%, Equity 9.85%, Stanchart 7.11%, DTD 6.72%, Barclays 6.57%, CBA 6.05% and Stanbic 5.62% to close the top Tier 1 Group.
Notable changes include the rise of Coop Bank to second position while Equity came in third, and the rapid retreat by Barclays from fourth position in 2016 to sixth in 2017.
Both Stanchart and DTB retain their steady climb to rank fourth and fifth respectively. It is not as yet apparent whether the loss of market share by Barclays has any connection with possible market jitters surrounding the change in ownership and rebranding currently underway.
On the overall, the re-jigging of the pecking order essentially reflects the level of agility and resilience of respective banks in Kenya’s rather turbulent operating environment that banks had to contend with in the last two years.
Of note is the interest rate capping that dramatically cut operating margins especially for lenders previously enjoying big interest spreads.
In addition, the extended electioneering period that was compounded with the unprecedented
cancellation and a repeat of a presidential election caused much anxiety to the
detriment of the economy.
The introduction of more stringent accounting guidelines under the IFRS 9 rules has intensified pressure on bank performance, not to mention the proposed higher taxation on bank profits and
transactions.
The market share Index is calculated by taking into account bank results across five key performance indicators namely total net assets, total deposits, total shareholders’ funds, total deposit accounts and total loan accounts.
