Inasmuch as the floor was removed, it has not had the desired impact of creating headroom for banks to lend, according to Genghis’ senior research analyst Churchill Ogutu.
Genghis head of research Joy D’Souza adds that before the lifting of the floor, many banks had restructured their liabilities so that the portion that attracted interest was so little.
“We saw banks like KCB #ticker:KCB and Stanbic, which have a huge chunk of corporate clients, restructure how they categorise different deposits, which meant that what was termed as fixed deposits was only a small portion of the books,” said Ms D’Souza.