Njuguna Ndung'u: Developments in the banking sector in Kenya
Remarks by Prof Njuguna Ndung'u, Governor of the Central Bank of Kenya, at the official
opening of Standard Chartered Bank Kenya Limited's Head Office, Nairobi, 20 June 2011.
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Your Excellency Honourable Mwai Kibaki, President and Commander-In-Chief of the
Defence Forces of the Republic of Kenya;
Honourable Uhuru Kenyatta, Deputy Prime Minister and Minister for Finance;
Mr. John Peace, Group Chairman of the Board of Directors, Standard Chartered Bank;
Mr. Peter Sands, Group Chief Executive Officer, Standard Chartered Bank;
Mr. Wilfred Kiboro the Chair of the Board of the Standard Chartered Bank Kenya;
Mr. Richard Etemesi, Chief Executive Officer, Standard Chartered Bank Kenya;
Board Members present;
Staff of Standard Chartered Bank Kenya;
Distinguished Guests;
Ladies and Gentlemen:
I am delighted to join you on this auspicious occasion in celebrating Standard Chartered
Bank Kenya's 100th Anniversary. It is indeed a momentous achievement for the bank and
perhaps to plan for the next 100 years will even be more exciting. May I take this opportunity
to appreciate the presence of His Excellency the President which gives this function great
significance and importance. Let me also commend the Board, Management and Staff of
Standard Chartered Bank for steering the institution from its formation in 1911, and for
successfully providing financial services to Kenyans for the last 100 years.
Over the years, the Bank has achieved several milestones with a number of strategic
alliances and acquisitions. These milestones have extended the customer base, geographic
reach and broadened the product range that Standard Chartered offers. The bank has
strongly focused on developing its franchises in Asia, Africa and the Middle East through
concentration on consumer, corporate and institutional banking. In Kenya, the bank focuses
on two core business divisions, Wholesale banking and Consumer banking. With regard to
its financial operations in Kenya, the bank as at March 2011, was among the top 6 banks
with an asset portfolio of Ksh.149 billion, thereby commanding a market share of 7.9 percent.
Customer deposits stood at Ksh.105 billion being supported by a capital base of Ksh.21
billion, while loans and advances amounted to Ksh.72 billion.
Your Excellency: Despite various shocks that have hit the economy in recent years, the
banking sector continues to exhibit resilience. The sector grew by 8.8% in 2010. Some
indicators of the financial sector performance witnessed in the last twelve months to March
2011 are as follows:

The sector's asset base expanded by 20 percent from Ksh.1.5 trillion in March 2010
to Ksh.1.8 trillion in March 2011 as banks continued to expand their lending
portfolio;
 The deposit base increased by 16.7 percent from Ksh.1.2 trillion to stand at
Ksh.1.4 trillion in March 2011 on account of branch expansion, financial inclusion
and domestic economic activity expansion;

The Total and Core Capital Adequacy to Total Risk Weighted Assets Ratios stood at
21.1 percent and 18.9 percent, well above the statutory minimum of 12 percent and
8 percent respectively, signifying the stability of the sector;

The sector's pre-tax profits increased by 16.5 percent from Ksh.17.0 billion in March
2010 to Ksh.19.8 billion in March 2011 while the average liquidity at end of March
2011 was 43.5 percent, well above the statutory minimum requirement of
20 percent.
This impressive growth has been supported by the expansion of banks into new market
frontiers, improved risk management and continuous legal and regulatory reforms by the
Government and Central Bank in a bid to enhance financial inclusion by reaching out to the
unbanked population.
Your Excellency, Ladies and Gentlemen: I would like to assure the banking sector and
stakeholders that the Central Bank will continue to develop cardinal policies aimed at
financial inclusion, development and deepening in consultation with the market. So far we
have seen the supply-side; the deposit accounts solved. We need to make it easier and
cheaper to borrow and loan accounts will grow from the current 2 million accounts compared
to 14 million deposit accounts. On the demand side, demand for loans is lagging because of
costs.
The CBK will is to create a conducive business environment for the sector to operate
efficiently, effectively and soundly. We continue to support and build strong institutions both
the commercial banks and the regulator must be strong. Strong institutions will always define
the appropriate incentives (and penalties) to encourage prudent behavior in the market. We
hope such measures and the ensuing environment will of necessity benefit clients of banks
who have taken financial inclusion seriously.
Your Excellency, Ladies and Gentlemen; Finally, allow me once again to applaud Standard
Chartered Bank Kenya Limited on your Centenary celebrations and wish the bank continued
prosperity in the future here in Kenya and in the East African region as a whole.
It is now my honour and singular pleasure to invite the Honorable Deputy Prime Minister and
Minister for Finance Hon. Uhuru Kenyatta to make his remarks and welcome His Excellency,
The President.
Welcome, Honorable Deputy Prime Minister.
Thank You and God bless you all