Kenya
Banking sector profile — Sub-Saharan Africa
Data as of September 2026 • TGB Intelligence Unit
Banking sector at a glance
Structure and performance
Kenya's banking sector comprised 38 commercial banks and one mortgage finance company at end-2025, with net assets of KSh8.35tn, up 10.3% on the year. Twenty local private banks held 70.6% of assets, 17 foreign-owned banks 28.9% and two state-owned banks 0.5%. Eight large banks accounted for 69.7% of the market on the CBK's composite index, led by KCB Bank Kenya with 17.9% of sector net assets. Kenya's largest groups, notably KCB and Equity, also run subsidiaries in Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo.
Balance sheets are funded by customer deposits, which rose 11.6% to KSh6.12tn in 2025. On the asset side, loans and advances accounted for 46.5% of the total and government securities 29.9%. Holdings of government securities grew 18.2% during the year, faster than net lending, which reinforces the sovereign–bank nexus. Liquidity is ample: the average liquidity ratio was 59.3% against a statutory minimum of 20%. Mobile channels are central to retail distribution, with mobile money subscriptions rising to 51.4 million in 2025.
Capital is strong in aggregate, but asset quality remains the sector's main weakness. The total capital adequacy ratio was 20.7% in December 2025, against a 14.5% minimum. The gross NPL ratio improved to 16.0% from 17.1%, although the NPL stock was broadly unchanged at KSh696.9bn and is concentrated in trade, real estate and manufacturing. Profit before tax rose 17.7% to KSh306.3bn. The CBK nevertheless reported that seven banks were below the KSh3bn minimum core capital and five below the total capital ratio at year-end.
Monetary policy has turned supportive. Ten consecutive cuts totalling 425bp took the Central Bank Rate from 13.00% to 8.75% by February 2026. The CBK then paused as fuel prices rose with the Middle East conflict, and inflation stood at 6.6% in August 2026. Loan pricing is moving to a KESONIA-based risk-based model, which should improve transmission. Principal risks are elevated NPLs, sovereign concentration, the tail of undercapitalised small banks and follow-up on the action plan agreed after Kenya's FATF greylisting in February 2024.
Structural trends
The shifts shaping banking in Kenya.
The Central Bank Rate was cut 425bp from 13.00% to 8.75% between August 2024 and February 2026, then held through August 2026.
Risk-based loan pricing anchored on KESONIA applies to new variable-rate loans from 1 September 2025 and to existing loans from 28 February 2026.
The gross NPL ratio improved to 16.0% in December 2025 from 17.1% a year earlier, although the stock of NPLs was broadly flat at KSh696.9bn.
Banks' government securities holdings rose 18.2% in 2025 to 29.9% of sector assets, outpacing growth in net loans.
Leading institutions
Largest banks in Kenya by total assets.
| # | Bank | Total assets (US$) | Type |
|---|---|---|---|
| 1 | KCB Group | US$16.8bn | Commercial |
| 2 | Equity Group | US$15.4bn | Commercial |
| 3 | Co-operative Bank of Kenya | US$5.9bn | Commercial |
| 4 | NCBA Bank Kenya | US$4.8bn | Commercial |
| 5 | Absa Bank Kenya | US$4.2bn | Commercial |
| 6 | Stanbic Bank Kenya | US$4.1bn | Commercial |
| 7 | I&M Bank | US$3.6bn | Commercial |
| 8 | Diamond Trust Bank Kenya | US$3.5bn | Commercial |
Total assets, FY2025: consolidated group audited figures for KCB Group and Equity Group; Kenyan bank-entity net assets per CBK Bank Supervision Annual Report 2025 for others, converted at KSh129/US$
Supervision and capital rules
The CBK licenses and supervises banks under the Banking Act and its Prudential Guidelines. The minimum total capital ratio is 14.5% and the core capital ratio 10.5%. A phased increase in minimum core capital is under way, with KSh3bn required at end-2025. In April 2025 the CBK issued Basel III-aligned guidelines on the liquidity coverage ratio, net stable funding ratio and leverage ratio. A revised risk-based credit pricing model anchored on KESONIA took effect in 2025–26. The Virtual Asset Service Providers Act 2025 extended CBK oversight to virtual assets. In September 2026 the CBK consulted on revised Prudential Guidelines and a framework for domestic systemically important banks. Deposit insurance is provided by the Kenya Deposit Insurance Corporation.
What changed in 2026
- February 2026: The CBK cut the Central Bank Rate by 25bp to 8.75%, the tenth consecutive reduction since August 2024.
- April 2026: The Monetary Policy Committee held the rate at 8.75%, pausing the easing cycle to assess oil-price risks from the Middle East conflict.
- September 2026: The CBK published draft revised Prudential Guidelines, risk management guidelines and a framework for domestic systemically important banks for consultation.
- September 2026: The CBK released a draft National Payment System Policy and National Payment System Bill 2026, and published its 2025 Bank Supervision Annual Report.
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