Nairobi, Sept. 8 -- The gap between what banks operating in Kenya charge on loans and pay on deposits narrowed to a 10-month low of 7.46 percentage points in July as lenders strike a balance between appeasing borrowers and attracting savers.

This means that the financial institutions are earning less profits on loans than before, with those having smaller non-interest income feeling the biggest pressure.

Central Bank of Kenya (CBK) data shows the spread, which measures the difference between the average lending and deposit rates, fell from 7.53 percentage points in June and 7.86 points in February, when it hit the highest level in nearly 10 years.

The July reading was the narrowest since September last year when the spread stood at 7.4...