NAIROBI, The Kenyan government plans to restructure and recapitalize the Post Office Savings Bank to help the parastatal achieve its target of mobilizing private savings as well as compete with other players in the financial services sector, says the Director-General of Public Investment and Portfolio Management of the National Treasury, Esther Koimett.
She said here Wednesday that the move was expected to help the country tap the high financial inclusion, which is currently at 80 per cent, to increase the ratio of savings that stands at a meagre 17 per cent of gross domestic product (GDP) while noting that Kenyans had yet to take advantage of the interest rate capping law which offers depositors higher interest to grow their wealth through savings.
With the savings to GDP ratio currently at 17 per cent, financial sector players feel the interest rate cap law has not achieved the desired results, which include increasing private savings.
Koimett says the plans to restructure and recapitalize Postbank were to enable it compete effectively in the financial market while at the same time drive the growth in private savings.
The conference is discussing among others; the impact of interest rate capping law in Kenya, cyber security, alternative delivery channels and changing customer needs.
Meanwhile, Kenya’s fifth larggest commercial bank by branch network, Family Bank has reported that its net loss widened to 748 million shillings (about 7.25 million US dollars) during the first nine months of this year after total interest income fell by nearly half to 4.9 billion shillings while total operating expenses marginally fell to 5.5 billion shillings.
The lender’s financials, however, indicate that it could be recovering, with loans and advances as well as customer deposits tripling over the last nine months.
Family Bank plunged into losses in the first quarter of this year after loans and advances fell from 9.5 billion shillings to 1.5 billion shillings in just three months while customer deposits fell from 2.8 billion shillings to 311 million shillings after the lender experienced challenges last year as its liquidity ratio fell to 14 per cent in December 2016, below the statutory minimum of 20 per cent.
Source: NAM NEWS NETWORK