The Co-operative Bank of Kenya extended the cheapest loans among top tier lenders for the better part of last year recorded at 15.18 per cent in July.
The two closed December with average lending rates of 16.90 per cent as per Central Bank of Kenya report.
Diamond Trust Bank on the other hand recorded an average lending rates of 16.80 per cent
Stanchart Bank however lowered its lending rates to 15.28 per cent in December after the CBR cut to lead the tier one lenders with the cheapest credit during the month, followed by Stanbic ( 15.36%), Equity ( 16.07%), DTB, Family Bank ( 16.86%), KCB ( 16.86%), Cop-op and NCBA ( 18.04 ) and ABSA ( 18.95%). HFC ( 20.17%), Commercial International Bank (CIB) Kenya ( 20.20%), Credit Bank ( 20.41%) and Middle East Bank ( 22%) have the highest lending rates.
On deposit rates, African Banking Corporation, Credit Bank and Kingdom Bank have the best rates on deposit at 14.78 per cent, 14.68 per cent and 14.39 per cent, respectively.
In 2024, the weighted average interest rate on deposits in Kenya’s commercial banks ranged from 10.77 per cent to 11.48 per cent.
At the same time, latest data by CBK shows 23 of the 38 commercial banks in the market reduced their lending rates between November and December, as the apex bank reduced the Central Bank benchmark lending rate to stimulate the economy, a move that came with low inflation and stable shilling.
Some 14 lenders however slightly adjusted their lending rates upwards with one retaining its margins, defying CBK’s calls to lower rates.
This, even as appetite for government securities remained high amid guaranteed returns as banks continued to balance returns on investment, in a market that is still experiencing high Non-Performing Loans.
The ratio of gross non-performing loans (NPLs) to gross loans stood at 16.5 per cent in October 2024 compared to 16.7 per cent in August, and is estimated to have averaged around 16.5 per cent in December.
Overall lending rates however went down to 16.89 per cent in December from 17.22 per cent in December, with all three tiers well represented in the rate cuts, with banks also giving depositors a slight gain on deposits as the average rate went up to 10.45 per cent, from 10.41 per cent.
