Kenyan banks' non-performing loans rose to 8 percent of the total in March from 5.7 percent in the same period last year, the central bank said. The latest figures, which are likely to add to worries over the health of the sector, were contained in a presentation by Patrick Njoroge, the central bank chief, to a parliamentary committee on April 21, seen by Reuters on Thursday.
Depositors and investors in East Africa's largest economy were rattled on April 7 when the central bank took control of mid-sized Chase Bank after it failed to meet its obligations. It was the third mid-sized or small lender to be put into receivership in nine months. It was re-opened on Wednesday under the management of the country's biggest bank, KCB.
In his presentation, Njoroge blamed "delayed payments" and "enhanced reclassification of accounts to non-performing status at end 2015 statutory audits" for the surge in bad debts. The government suffered a cash crunch in September and October last year, caused by revenue shortfalls, which led to delays in payment of its suppliers. Njoroge, who was appointed last June, has made reporting requirements for banks more stringent, making them categories bad debts accurately and provide for them fully, leading to a reduction of profit for some lenders. Gross loans for the industry stood at 2.2 trillion shillings ($21.77 billion) last month, up from 2.0 trillion shillings in March last year, Njoroge said in his presentation.