njuguna ndung ’ u : kenyan banking sector development over the last six years remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the kenya bankers association 50th anniversary luncheon, nairobi, 7 august 2012. * * * honourable njeru githae, minister for finance of the republic of kenya ; dr. donald kaberuka, president of the african development bank ; mr. richard etemesi, chairman, kenya bankers association ; mr. habil olaka, chief executive officer, kenya bankers association ; members of the kba governing council ; distinguished guests ; ladies and gentlemen : it is a great pleasure for me to join you on this auspicious day to celebrate the golden jubilee of the kenya bankers association ( kba ). allow me at the onset to thank the honourable njeru githae, kenya ’ s minister for finance and dr. donald kaberuka, president of the african development bank for gracing this occasion. their presence demonstrates the importance they attach to the role that the kenyan banking sector plays in the economy. let me also congratulate the members and management of kba on turning 50. ladies and gentlemen : the choice of the theme for this luncheon, “ banking ’ s role in development, recognizing the achievement while catalyzing greater private - public sector collaboration ” depicts the path through which the kenyan banking sector has scaled the heights over the last six years. the current resilience of our banking sector is the outcome of partnership between the regulator and the regulated. this is not a common occurrence in most sectors, but i can confidently tell you that cbk and the kenya bankers association ( kba ) have successfully demonstrated they are agents of development in the financial market. ladies and gentlemen : the tremendous growth in the kenyan banking sector in the midst of financial turmoil in the developed markets has been put to question by parties who may not be aware of the past efforts towards a more sound and resilient sector. allow me to mention just a few initiatives that cbk and kba undertook jointly over the last five years to complete the financial infrastructure set up in the economy and whose outcome is reflected by the unrivalled performance in the region. 1. roll out of credit information sharing : kenya witnessed several unsuccessful efforts by the kenyan banking sector to introduce credit information sharing ( cis ) in kenya since 2003. however, cis became a reality in 2008 when a regulatory framework was developed jointly

for the year ended december 2011. this was a 20. 4 % increase from ksh. 74. 3 billion ( usd895 million ) returned in the same period in 2010. the number of banks is growing to create strong banks : mergers will be required, but that is a market outcome. ladies and gentlemen : i would like to assure the banking sector and other market players that the central bank will continue to support the market development by providing an enabling environment for growth in the banking sector. allow me to outline the thrust of the initiatives we shall continue to inculcate to ensure the sector operates efficiently, effectively and soundly. the initiatives will be anchored on three pillars : first, strengthening financial stability, supervisory and regulatory framework. in particular, cbk will adopt a consolidated supervision approach to take cognisance of the growing pan - african nature of the kenyan banking sector. bis central bankers ’ speeches second, enhancing financial integrity in the banking sector so as to ensure that the financial systems are safeguarded against money laundering and financing of terrorism. third, promoting financial inclusion for financial deepening and development in line with the aspirations under the kenyan vision 2030. distinguished guests, ladies and gentlemen : finally, allow me once again to applaud firstrand bank limited for establishing a physical presence in kenya through a representative office. as the central bank we are ready to support you as you develop your business not only in the kenyan market but also on the eastern african side. with these remarks, it is now my pleasure to welcome honourable njeru githae, minister for finance of the republic of kenya to make his remarks and officially launch the representative office of firstrand bank here in kenya. thank you. bis central bankers ’ speeches