(Ecofin Agency) - Banks listed on the Nairobi Securities Exchange (Kenya's financial market) posted a strong stock market performance for the 30 days ending August 31, 2020.
The Co-operative Bank, Equity Group, ABSA, and Kenya Commercial Bank posted an increase of 13.3%, 12.6%, 10.6%, and 7.6%, respectively. Overall, bank stocks pulled the Nairobi Stock Exchange upward over the period under review.
This result, a sign of positive sentiment among investors, contrasts, however, with the mixed performances in the first half of 2020. For 9 of the 10 banks listed on the Kenyan market, the overall net profit was 30.2 billion shillings ($279.45 million), down 25% compared to the same period in 2019.
This situation is mainly due to the increase in credit risk provisions, which now amount to KSh38.7 billion. This amount is 228% higher than that in 2019 and far exceeded the forecasts of analysts who only envisaged 24 billion shillings of provisions over the period.
On September 4, several banks listed in Kenya ended the session with declining shares. The decline was significant for Kenya Commercial Bank and Equity Group. They failed to meet investors’ expectations over the first six months of 2020.