Nairobi, Feb. 10 -- Commercial banks are expected to report lower profits in the current financial year ending December 2026 due to lower earnings from government securities and shrinking interest rate margins, according to credit rating agency Moody's.

The rating agency, which gave Kenya's banking industry a stable outlook, expects loan uptake by the private sector to grow but not sufficiently to cover for expected drop in income due to lower yields from Treasury bills and bonds.

Banks, which are yet to release their 2025 full year financial results, had posted an 11.8 percent growth in pre-tax profit in the nine months to September partly helped by cheaper deposits.

The interest on government securities have been on a downward trend ...