According to the Central Bank of Kenya (CBK), the banking sector’s gross loans and advances increased to Sh1.45 trillion in June 2013 from Sh1.4 trillion in March 2013, translating to a growth of 3.6 per cent.
“Credit risk is the single largest factor affecting the soundness of banks and the financial system as a whole and lending is the principal business activity for most banks,” said CBK in the report.
Some commercial banks have forecast that their NPLs will remain constant in the third quarter ending September 30. Others foresee a drop in the level of NPLs in sectors such as agriculture, building and construction and tourism, restaurant and hotel sectors, according to a CBK credit survey report