During the month, listed commercial banks released their 3Q21 financial results. The results indicated continued recovery in the sector as banks’ asset quality improved. Most lenders registering an increase in non-funded income driven by higher fees and commissions and foreign exchange income. However, concern remains over the marginal growth in the loan books which signaled a reduction in private sector credit growth. Click here for an analysis of the sector’s 3Q21 numbers.
Safaricom, Centum, KPLC and KenGen also released their financial results. Safaricom’s HY22 net earnings increased by 12.01% y/y to KES 37.06Bn which was driven by an uptick in service revenue and lower operational costs. KPLC similarly experienced an increase in their FY21 earnings seen by a 258.68% y/y growth to KES 1.49Bn driven by
increased economic activity and a higher customer base. Meanwhile, KenGen and Centum saw a decrease in earnings with KenGen’s FY21 net earnings decreasing by 93.94% y/y to KES 1.19Bn due to increased tax provisions. Centum HY21 net income decreased by 86.90% y/y to KES 0.01Bn. However, the company recorded an improvement in group performance on the back of an increase in investment income and reduced finance costs.
Inflation declined to 5.80% in November versus 6.45% in October while the CPI increased by 0.45% from 116.674 in October to 117.203 in November. We expect headline inflation to remain below 6.0%. However, poor weather condition and global supply chain constraint remain a concern as this is likely to exert pressure on food prices.
KNBS released the 2Q21 economic performance results that saw the economy grow by 10.1%. This significant growth was mainly driven by the education, transport and storage, ICT and manufacturing sectors.
The shilling further weakened to close at KES 112.49 against the dollar. The depreciation has mainly been attributed to higher demand for dollars as business activity increases.
During the month, the NSE formally kicked off the day trading of shares in a bid to increase the market turnover.
The month additionally saw National Bank of Kenya get delisted from the stock exchange following its acquisition by KCB.
