There is some grain of truth in the excuse. The low tier banks are the ones likely to suffer most from interest capping and the tiers ones to benefit the most.

It is a vicious catch 22:

(1) Small banks lose the capacity to market (mostly consumer) loans to risky sectors - profitability declines and a few of them shut down. Tier ones pick up the pieces

(2) A stampede results from the above as depositors move their money to so called 'safe' banks. Tier ones benefit

(3) In a desperate effort to survive, some tier 3 and 4 consolidate, sell off to strategic investors or become conduits for the entry of Multinational banks. Tier ones (KCB) pick up some juicy properties on the cheap

Either way the Mwangi's, Muriukis and Oigara's are sitting pretty. Oigara was once quoted as saying 'Cap or no Cap, the [big] banks will be OK..." He knew what he was saying

And the CBK Governor seem to have long given up his argument that small banks should be defended because they serve niche markets that the big ones don't. He has made barely a peep as the move to raise capital requirements is reintroduced. You recall the earlier effort was shelved at his insistence.

Nevertheless this is one time when allowing market forces to play out might be beneficial to Wanjiku, despite the long term risk of creating behemoths 'too big to fail.'

The massive investments in process reform and technology that the big banks have made has enabled them to shrug off the impact of Caps and continue to make huge profits. Wanjiku and the wider economy are the ultimate beneficiaries here - one reason I support the ongoing consolidation. The likes of Sanlam and even Family Bank, with their small and shaky capital bases, would be hard pressed to make such investments and should be taken over.

Yeah I don’t get the “rate cap angle” to the profit warning here

Everything is connected. Even your current balance in the wallet right now is somehow tied to the cap