Nairobi, July 29 -- Commercial banks placed their biggest bets on construction projects while quietly pulling billions of shillings out of the logistics and communications sectors in the year to April, an indication of the lenders' expected economic expansion points.

On average, banks redirected credit toward sectors they consider less risky and more profitable than spreading it evenly across the economy as private sector lending recovered from last year's contraction, the latest Central Bank of Kenya (CBK) data show.

Outstanding loans to the private sector rose 6.3 percent, or Sh386.3 billion, to Sh6.48 trillion in April, reversing a 1.3 percent decline a year earlier after the CBK began cutting interest rates.

The recovery in lending...