CORRECTED-UPDATE 2-Kenyan banks eye solid earnings despite high rates
(Corrects eighth paragraph in April 26th story to show KCB was best performing stock in the NSE-20, not entire bourse)
* KCB Q1 rises 35 pct, assures on full year profit growth
* Equity Q1 up 29 pct, says lending at lower rates helped
* NIC Q1 also up 29 pct on interest income growth
By Duncan Miriri
NAIROBI, April 26 (Reuters) - Kenya Commercial Bank (KCB) and Equity Bank predicted strong profits this year after a resilient performance in the first quarter in the face of high interest rates and inflation.
The central bank raised its key lending rate by 11 percentage points to 18 percent in the final quarter of last year to prop up the shilling and fight high inflation, creating worries that the demand for loans would fall and defaults rise.
James Mwangi, the chief executive of Equity, whose shares are amongst the most traded on the Nairobi bourse, said his bank had kept the cost of funds low, allowing it to charge affordable lending rates that buoyed its profits.
"Equity maintained an average (lending rate) of 17.8 percent, which was very low compared to the 32 percent (other) banks are charging," Mwangi told reporters. Continued...