Nairobi, May 31 -- Commercial banks are squeezing depositors in the race to grow profits as they cut interest on savings by larger margins compared to lending rates.

Central Bank of Kenya (CBK) data shows the savings rate - the return paid by banks for demand deposits - fell to 6.86 percent in March this year from 11.48 percent in June 2024, representing a 4.72 percentage drop.

But lending rates have fallen by a smaller 2.19 percentage drop over the period to 16.85 percent in March, reflecting how banks are using cheaper deposits to drive profits as high-net-worth investors with cash to keep in banks lose out.

The spread - the difference between the average lending rate and the fixed deposit rate - increased to 7.80 percent in March fr...