National Bank of Kenya: power shortage cuts profits

By Nizar Manek, 26 March 2013
(Financial Times) --
It has been a tumultuous few days for shares in National Bank of Kenya, the country’s ninth biggest lender by market capitalisation. A lack of the price-setting power enjoyed by bigger banks meant it first spooked investors with a profit warning last week – and then sent them scurrying on Monday when it reported a 52.8 per cent fall in pre-tax profits for 2012.
The bank fell victim to a higher cost of capital – through higher interest rates paid to its depositors – and its inability to pass this on in the form of higher interest rates charged to borrowers.
(489 words)