NCBA Group has announced that it will raise its lending rates later this month in response to the recent increases in benchmark lending rates set by regulators in both Kenya and the US. The bank plans to increase lending rates for both shilling and dollar-denominated loans to 10.5 percent and 12 percent, respectively, effective from May 29th.
The Central Bank of Kenya (CBK) increased its benchmark lending rate to 9.5 percent in March, while the US Federal Reserve lifted its rate to between 4.5 percent and 5 percent. Both actions were taken in order to combat rising inflation in the respective markets.
NCBA is just one of several tier-one banks that have raised lending rates on the back of the CBK’s increase in benchmark lending rates, as well as the introduction of risk-based pricing following the removal of interest rate caps.
Equity Bank Kenya, Absa, and Stanbic Bank are among the other banks that have been permitted by the CBK to raise their lending rates in line with the new risk-based framework.
In a notice to customers, NCBA stated that it was raising its base lending rates due to the recent increases in benchmark rates in both Kenya and the US.
The bank’s loan book in Kenya was valued at Kshs 249.8 billion in the financial year ending December, showing a rise of 13.5 percent compared to the previous year’s figure of Kshs 220.01 billion.