S&P: Kenya Commercial Bank view to negative

Standard & Poor’s said it revised the outlook on Kenya Commercial Bank Ltd. to negative from stable.

The agency also said it affirmed the bank’s B+ long-term and B short-term counterparty credit ratings.

The outlook revision follows a similar action on the Republic of Kenya, S&P said.

Under the agency’s criteria, S&P said it does not rate Kenyan banks above the sovereign because of likely direct- and indirect-influence of sovereign distress on domestic banks’ operations, including their ability to service their foreign-currency financial obligations.

Kenya’s public finances are deteriorating more rapidly than previously anticipated with the 2014 to 2015 fiscal year deficit reaching 9.4% of GDP, compared with a forecasted 7.3%, the agency said.

As a result, general government debt is expected to reach 60% of GDP by the end of the next fiscal year on the back of infrastructure- and energy-related project financings, which should support future economic growth, S&P said.

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