Nov. 24 (Bloomberg) -- Cooperative Bank of Kenya Ltd., the East African nation’s fifth-largest lender by market value, fell to the lowest level since 2009 on concern a stronger shilling and rising borrowing costs will hurt demand for loans and foreign currency.
The stock declined for a third day, declining 1.8 percent to close at 13.6 shillings at 4:14 p.m. in Nairobi. A close at that level would be the weakest since June 16, 2010, according to data compiled by Bloomberg.
“The drop is due to expectations of a lower year-end performance as credit growth is expected to slow down on account of higher borrowing costs,” George Bodo, a research analyst at Nairobi-based ApexAfrica Capital Ltd., said in a phone interview. “The strengthening of the shilling is expected to lower foreign-exchange income.”
The shilling appreciated 0.2 percent, extending this month’s gain to 10 percent, the most among more than 170 currencies tracked by Bloomberg. Kenya’s central bank increased interest rates by 5.5 percentage points to a record 16.5 percent on Nov. 1 to curb inflation that is double the government’s target of 9 percent for the current fiscal year.
Co-operative Bank, which reported a 22 percent jump in nine-month earnings, raised its based lending rate to 24 percent, according to a statement in the Daily Nation newspaper published on Nov. 16.
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