African banks including Egypt’s Commercial International Bank (CIB), Nigeria’s Access Bank and South Africa’s Nedbank are expanding into Kenya’s lucrative banking market, but strong domestic lenders are making it difficult for new entrants to achieve rapid returns.
Kenya’s appeal lies in its role as a gateway to the East African Community, a regional bloc that has been growing at more than 5% annually and offers access to a fast-expanding consumer market.
“It becomes hugely, hugely attractive,” said Kenny Fihla, CEO of South Africa’s Absa Bank, which said last week it was increasing its stake in its Kenyan business to as much as 85% through a tender offer.
African banks have stepped up dealmaking as global lenders including Standard Chartered and Societe Generale retreat from some smaller markets to focus on core operations. Growing investment requirements in technology have also encouraged banks to seek scale through acquisitions.
However, gaining ground in Kenya’s crowded banking sector remains challenging. The industry generated about $2 billion in annual pretax profit in 2024, according to central bank data, with established players such as Equity Group and KCB Group benefiting from large customer bases, regional networks and advanced mobile banking platforms.
“Have we been as profitable as we would have wanted to be? I think one can always look in hindsight and say ‘should have grown faster, could have grown faster’,” says Tirus Mwithiga, CEO of CIB’s Kenyan business, adding that the bank remained confident due to growth in assets and improved profitability.
Kenya’s largest banks typically hold market shares in the low-to-mid teens, while second-tier lenders such as Family Bank operate in the high single digits. CIB, which entered Kenya six years ago by acquiring a smaller lender, holds about 0.3% of the market.
“When you look at our concentration of 23 million customers, and a capital base of 350 billion shillings, we can outrun them, we can outperform them,” says Equity Bank CEO James Mwangi.
South Africa’s slow economic growth and mature banking sector have encouraged its largest lenders to look for expansion opportunities elsewhere on the continent.
Nedbank agreed earlier this year to acquire a controlling stake in Kenya’s NCBA as part of its regional expansion strategy, beating South African rival Standard Bank, which operates in Kenya as Stanbic, according to Kenyan banking officials.
“The transaction is aligned with Nedbank’s long-term strategy to expand into high-growth markets across the continent,” Nedbank says.
Nigeria’s Access Bank completed its acquisition of National Bank of Kenya from KCB Group halfway through last year.
Kenya’s planned increase in minimum bank capital requirements, from 1 billion shillings in 2024 to 10 billion shillings by 2032, is expected to drive further consolidation in the sector. The country also attracts banks seeking a regional headquarters location because of its transport links and business ecosystem.
Relatively strong financial regulation, the ability to repatriate dividends and a freely traded currency have added to Kenya’s appeal.
The country’s large consumer market and advanced mobile money ecosystem, led by Safaricom’s M-Pesa, have also supported digital banking growth.
“The level of development of that tech and payment scene is probably among the most advanced in the whole continent,” said Jeremy Awori, CEO of Ecobank, which operates in 34 African markets including Kenya.
Despite the opportunities, foreign banks face risks including Kenya’s high public debt, elevated non-performing loans and exposure to global shocks such as fuel price fluctuations.
Political uncertainty is another concern, with Kenya scheduled to hold a general election in August 2027.
“Everybody is hoping and praying that goes smoothly and doesn’t become too disruptive to the economy,” says CIB Kenya’s Mwithiga.
Executives say they remain positive about Kenya’s long-term banking outlook.
“If you’re a long-term investor … it is a market that has promise, it has growth, it has delivered high returns on equity over the last decade or so,” said Standard Chartered Kenya CEO Birju Sanghrajka.
Faustine Ngila is the AI Editor at Impact Newswire, based in Nairobi, Kenya. He is an award-winning journalist specializing in artificial intelligence, blockchain, and emerging technologies.
He previously worked as a global technology reporter at Quartz in New York and Digital Frontier in London, where he covered innovation, startups, and the global digital economy.
With years of experience reporting on cutting-edge technologies, Faustine focuses on AI developments, industry trends, and the impact of technology on society.
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