So loans at 13% and savings interest at 9%?
If you were James Mwangi, would you deploy your 10 Billion capital to earn 4%pa? I have not even included cost of production.

We borrow from Saccos at 12% and also pool funds as Chammas. The banks can bank the low risk corporates and paysliped employees.

Most of the legislative members are learned folk. It's not personal gain at stake but the soul of Kenya. Banks were profiteering for a long time

You are not making sense. If they were looking for bribes then the motion would not have been tabled in its current form

Treasury bonds rate are at 12.6%, lending to the government will continue. I would also deploy that 10bn capital to other subsidiaries outside Kenya.

True

What's your problem here, I don't get it.

As things stand now, banks are making supernormal profits, no other industry is even close to competing (save for Safaricom).

Mark you banks don't even require much in terms of fixed capital outlay, they simply just pay wages (to non specialised employment pools), no other longterm investment is needed, compare this with say KQ that needs to buy 15B aeroplanes, or a cement company that needs to set up capital intensive factory or even a power generation plants that cost 100Bn in initial capital outlay.

They have it easy, they should be quietely enjoying their loot and hoping new entrants don't join and share their pie?

Spot on. Actually if you combine the banking sector profits. They are way larger than the telco.. The fact is banks are reporting profits that should be reported in the SME space. A transfer of reporting in some sort. E.g instead of Shiko Spares reporting a profit, its sent to losses by high interest rates and her car is repossessed and auctioned, the bank books the gain. Wafs Hardware defaults on a secured loan, his land in Vihiga is sold and bank reports it as a profit! Shindwe!!

Firstly, I don't think Zambia's banking sector is comparable to Kenya's. Its quite small and secondly, the health of Zambia's economy is mainly influenced by commodity prices (read minerals) and not their financial sector. I am sure any negative impact to their economy has nothing to do with interest caps.

Worth knowing, the restrictions placed on the banking sector as a result of interest rate caps are way less stringent than what the west have on the financial sectors, they may not call such restrictions controls, but in all but name, such are controls, please check the levels of disclosure and compliance banks are required to have with regards to lending and charging of fees, check how they are required by law to price loans. As a result Mainstreet baking in the west make very marginal profits.

Here in Kenya, banks are making super-normal profits. Take for instance KCB, they made a PBT of 29B in 2017 from shareholders equity of 106B, note that the SE is inclusive of retained earnings so actual capital outlay would be way less. I am willing to bet less than the PBT for that year.

Their net interest margin was 9.1% in 2017. that's a very large gap.

We need to squeeze this banks abit more, they still have alot of wiggle room.

I also want to see this experiment to run its full course. Let's wait and see