BANKING FACTS: DID YOU KNOW?

According to the Eastern Africa Banking Sector review 2013, by Ernst & Young (EY Tanzania) covering Kenya, Uganda, Rwanda and Tanzania (known as KURT);

Key findings for 2013 highlight the following points;

• Total KURT banking assets rose by 15% to US$ 52bn in 2013, from US$ 45.2bn in 2012. Bank assets across KURT collectively grew 2.6 times faster than regional GDP.
• Bank assets grew three times faster than GDP in Kenya, at a 2.4x multiple in Uganda, and in both Tanzania and Rwanda, at a 2x multiple.
• However, despite the rapid asset growth, profits growth was somewhat slower, at 9%.
• These slower profits were largely caused by low and declining interest rates - in three of the four KURT markets. This led to margin squeeze, which was further aided by rising bad debts in some countries.
• Kenya remains the dominant banking market in the region, holding more than half of the total banking assets, with growth outpacing that of its regional peers during the year.
• KURT's share of the total sub-Sahara Africa banking market is gradually rising although South Africa remains by far the dominant banking market - for now.
• Large banks typically enjoy stronger economies of scale than their smaller peers. This is true of banks across the globe and KURT is no exception, although Rwanda stands out as a market where smaller banks enjoy some noticeable advantages.
• The introduction of credit bureaus into the market is likely to stimulate credit growth, and further down the line, economic growth.
• However, the additional transparency that credit bureaus provide will come at a cost in the short-term, as information on clients is collated and centralised.

Share of bank assets

Kenya - 60%

Uganda - 13%

Rwanda - 4%

Tanzania - 23%