Shares in KCB Group,, Kenya's biggest bank by assets, and Equity Bank, the biggest in terms of number of customers, fell sharply on Monday as investors reacted further to a government move to cap commercial lending rates. Shares in KCB and Equity were both down 9.3 per cent on the Nairobi Securities Exchange at 24.50 shillings and 26.75 shillings respectively.
Co-operative Bank of Kenya dropped 9.7 per cent to 9.75 shillings, while NIC Bank fell 8.3 per cent to 22.00 shillings.
President Uhuru Kenyatta last week signed into law a bill capping commercial bank lending rates in a bid to boost the economy. Businesses in the East African country have complained that high rates, which average 18 per cent or more, hobble corporate investment. Analysts, however, have said capping rates may be counterproductive as it makes banks less willing to lend.
