Access Bank Kenya, the Kenyan banking unit of Access Holdings, a pan-African financial services conglomerate led by Nigerian multimillionaire banking mogul Herbert Wigwe, has announced an upward review of its loan pricing.
The decision aligns with the new benchmark rate set by the Central Bank of Kenya (CBK). The move comes shortly after two of Kenya’s largest financial institutions, Equity Group and NCBA Group, raised interest rates on their loans.
The CBK recently increased the Central Bank Rate (CBR) from 9.5 percent to 10.5 percent, marking the highest level in nearly seven years.
In line with the move, Access Bank said it would adjust its lending rate to 14.63 percent, up from the current 14.22 percent. This adjustment will take effect on Aug. 8 and apply to all existing and new Kenya shilling-denominated facilities.
While this increase aligns with the Central Bank’s rate hike, it could potentially discourage Kenyans from seeking loans due to the higher cost of borrowing. As a result, Kenyan banks, including Access Bank Kenya, the Kenyan banking unit of Access Holdings, may experience lower interest earnings.
Access Holdings, a leading financial services group in Nigeria, operates in 12 African countries, including Kenya. The conglomerate has been actively expanding its presence in Europe and recently announced plans to launch a new unit in France.
The group recorded a significant surge in profit, with a 23.9-percent increase from N57.82 billion ($124.62 million) in the first three months of 2022 to N71.66 billion ($154.5 million) in the same period of 2023.
This remarkable profit growth was attributed to a substantial rise in interest and non-interest incomes.
Additionally, the group’s net foreign exchange gains skyrocketed from N85.83 billion ($185 million) in the first quarter of 2022 to an impressive N112.39 billion ($242.2 million) in the first quarter of 2023.
