njuguna ndung ’ u : banking and financial sector developments in kenya remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the kenya institute of bankers 2nd national banking & finance conference, mombasa, 26 june 2014. * * * mr. reuben mbindu, chairman, kenya institute of bankers ; chief executives of commercial banks and other financial institutions here present ; distinguished ladies and gentlemen : it is with great pleasure that i join you this morning at the start of this landmark conference. i take this opportunity to thank the kenya institute of bankers for fulfilling its promise to hold such a conference on an annual basis. i appreciate your invitation to this conference and applaud everyone who participated in organising this conference for their commendable commitment. ladies and gentlemen : my task this morning is to represent the cabinet secretary to the national treasury who could not make it as the chief guest to this 2nd national banking and finance conference. let me start with some few remarks on the performance of kenya ’ s banking sector. the banking sector has recorded an improved performance – the sector ’ s balance sheet expanded by 15. 6 percent from ksh. 2. 50 trillion in may 2013 to ksh. 2. 89 trillion in may 2014 mainly supported by an expansion of banking services and financial inclusion. consequently, the sector ’ s profitability increased by 12. 5 percent from a profit before tax of ksh. 48. 7 billion for the quarter ended may 2013 to ksh. 54. 8 billion for the quarter ended may 2014. the gradual improved performance has been supported by continued rollout of innovative banking products, adoption of cost effective delivery channels, and continued expansion of banks across the country and beyond kenya. ladies and gentlemen : as part of kenyan banks desire to improve their performance, they have explored business opportunities within and beyond kenya ’ s borders. as at 31st december 2013 : • eleven kenyan banks had established subsidiaries in east african community ( eac ) member states and south sudan. one kenyan bank owned a 50 % stake in a mauritius bank while another kenyan bank had a minority stake of 11. 4 % in a bank operating in malawi. • the eleven kenyan banks had established 288 branches in eac member states and south sudan as compared to 223 branches in 2011. • the foreign subsidiaries had a total of 5, 219 employees compared to 3, 760 in 2011. • the total assets of the foreign subsidiaries stood at ksh, 306. 3 billion

njuguna ndung ’ u : the future of financial service delivery in kenya introductory remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, during the second scenario building workshop on “ the future of financial service delivery in kenya ”, nairobi, 16 april 2010. * * * chief executives of commercial banks here present ; distinguished guests ; colleagues ; ladies and gentlemen ; i am honoured this morning to be addressing this distinguished gathering. allow me therefore at the outset to thank you for accepting our invitation to attend this second scenarios building workshop on the future of financial service delivery in kenya. i am deeply convinced that our deliberations today will go a long way in shaping the future of our financial industry as was the case with the first workshop held last year. ladies and gentlemen : this year, nairobi scenario ii workshop comes at a time when a number of countries around the world are increasingly pursuing the development of branchless banking policy frameworks. this indicates branchless banking is receiving increasing international attention and capturing the imagination of a wide array of players and international bodies. in particular, as part of its commitment to financial inclusion, the g - 20 has established the access through innovation ( ati ) subgroup of the financial inclusion experts group. ladies and gentlemen : kenya ’ s financial inclusion agenda is premised on its current development blueprint, vision 2030. under this vision, kenya aspires to be a middle income country by 2030 and the financial sector is expected to mobilize substantial financial resources required to realize this vision. in addition, savings rate are targeted to increase to 32. 0 percent within the period. for this to happen, financial reach, inclusion, and deepening to increase financial instruments will need to take place. the central bank on its part will have to foster stability and accessibility of the kenyan financial system. in this regard, we will continuously implement reforms to : strengthen the banking sector through an enhanced legal and regulatory framework including scaling up minimum capital requirements. address structural rigidities that impact adversely on the cost of financial services. some of these we need to learn from you and then we can improve the environment for you. enhance efficiency and safety of payment and settlement systems through use of innovative internet and mobile based solutions. as it were, reliable and efficient payment systems increase both the effectiveness of monetary policy and minimize payment system risks. ladies and gentlemen : in order to accomplish the tenets of branchless banking across the globe, we need to unanimously