In the last decade, the Kenyan banking sector has achieved monumental growth and even expanded into the East African region. One of the things that led to this growth was the shift from typical traditional banking systems to automation and local adaptation. Another push was the emergence of foreign banks in the banking sector.
The Central bank of Kenya oversees the entire banking sector. In a brief overview, there are 44 main banking institutions in Kenya, 31 are locally-owned banks while 13 of them are foreign-owned. The locally-owned institutions include 3 banks that the government has shares in, 1 mortgage financial institution, and the remainder are 27 commercial banks.
The biggest banks in Kenya are:
- National Bank of Kenya
- Kenya Commerical Bank
- Equity Bank
- Cooperative Bank
- Diamond Trust Bank of Kenya
- Standard Chartered Bank
- Barclays Bank
- Stanbic Bank
- NIC Bank
- I&M Bank
- NCBA
- Absa Bank Kenya PLC
- Citibank N.A. Kenya
- National Bank of Kenya
- Prime Bank Ltd
- Conclusion
1. National Bank of Kenya
The government-owned National Bank of Kenya was established in 1968 and is one of the largest banks in Kenya. It was initially formed to empower Kenyans after independence and enable them to access credit and control their economy. In 2019, it became a subsidiary of the Kenya Commercial Bank Grop. The bank has the largest assets in Kenya which amount to over $7 billion.
2. Kenya Commerical Bank
Kenya Commercial Bank was established in 2015 with its headquarters in Nairobi. It is better known as KCB Bank and it promises to bring banking to many Kenyans who might remain unbanked. It grew rapidly and now it has the largest banking network in Kenya with a total of 168 branches. This bank has assets that amount to more than $3.5 billion.
3. Equity Bank
Equity Bank Kenya Limited was established in 2014, it has 38 branches and several offices in Nairobi. It has expanded its subsidiaries to countries such as Uganda, South Sudan and Rwanda, and Uganda. Therefore has a huge customer base in East Africa which is estimated to be 9.2 million. The bank has an immense network of 173 branches in Kenya alone.
4. Cooperative Bank
The Co-operative Bank of Kenya was established in 1965. It is one of the banks that use the unique Agency banking model. It was once awarded Best Bank of Kenya by the London Financial Times. The bank is estimated to have over 7.5 million accounts. It has the second-largest customer base in the country. Like many banks, it has its headquarters in Nairobi. The bank is also listed on the Nairobi Securities Exchange.
5. Diamond Trust Bank of Kenya
Diamond Trust Bank Kenya is a key subsidiary of the Diamond Trust Bank Group which has a number of businesses in Uganda, Tanzania, Burundi, and Rwanda. In 2018, it was the fifth-largest commercial bank and it serves as the flagship bank of the Diamond Trust Bank Group. The mega banking group is estimated to have over 100 branches in East Africa.
6. Standard Chartered Bank
Standard Chartered Bank Kenya Limited is the oldest bank in Kenya has been in the country for over 100 years. It was the first foreign bank in Kenya when it was founded in 1911. It is officially regulated by the Central Bank of Kenya. It is also a known subsidiary of Standard Chartered PLC incorporated in England and Wales which has 75% shares in the bank. It has a banking network of 36 branches. The bank has won many awards, especially in digital and mobile banking.
7. Barclays Bank
Barclays Bank Kenya was established in 1916 not long after Standard Chartered. It is one of the leading banks and parts of Absa Group Limited which is listed on the Johannesburg Stock Exchange in South Africa. The bank has 121 branches as well as assets of over $2.5 billion. The bank promises to have a positive impact while providing the best wealth management solutions to meet local challenges.
8. Stanbic Bank
Stanbic Bank is a Standard Bank Group Division (based in Johannesburg, South Africa) and currently Kenya’s sixth-largest bank licensed by the Central Bank of Kenya to contribute banking services to the growing economy of Kenya.
It has a total number of 24 branches that span across major towns in the country and also trading in other African countries like Botswana, Ghana, Malawi, Nigeria, Zimbabwe, Congo, Zambia, South Sudan, and Uganda. Financial services including corporate and investment banking, mortgages, credit cards, business, and personal banking offering services to small-to-medium firms and individuals are the day-to-day services provided by the bank.
9. NIC Bank
National Industrial Credit Bank is a commercial bank that was founded in 1959 with 42 branches across the country, contributing loans, investments, savings, credit cards, transaction accounts, and debit card services to the banking industry in Kenya since it made its shift from a non-bank financial institution to a regional full-service bank. With an approximate number of 26,000 shareholders, the bank is valued at about $4.88 billion in total asset base in 2019, September.
The bank also maintains 5 other branches in Tanzania and 3 in Uganda and has an establishment of Strategic Business Units that further the institution’s provision of financial products and services.
10. I&M Bank
I&M Bank was founded in 1974 as a community financial company that transitioned to a commercial bank in 1996 contributing services to small and large businesses and corporations as well as premium individual customers.
Maintaining a network of 42 branches across Kenya with each branch having an on-site ATM, valued at $2.52 billion in assets and $424 million in shareholder equity and active international operations in 3 other countries. It includes Asset finance, Internet banking, Diaspora Banking, Mobile Banking, and Wealth Management as some of its specialties.
11. NCBA
NCBA was formed after a merger between Commercial Bank of Africa and NIC Bank, in May 2019. It offers banking services to individuals, SMEs, and corporate clients. Some of its services include online banking, personal and business loans, insurance financing, and liquid asset investments, among others related banking services.
In 2020, it announced pretax profits of KES 4.98 billion for the year ending December 2020. And its total operating income for that year was KES 45.8 billion, a 41% rise from the previous year.
Moreover, the group’s total assets as of December 2020 were at KES 528 billion, with a capital position of KES 64.8 billion. That gave it a liquidity ratio of 55%, which enabled it to serve customers in all its 71 Kenyan branches.
12. Absa Bank Kenya PLC
Absa Bank Kenya PLC is among the leading investment banks that serve individuals, SMEs, and Corporate clients. Its core banking services include personal and business loans, personal credit, personal and business insurance financing, and Islamic banking.
For its corporate clients, it offers transactional solutions, asset financing, trade financing, market solutions, company credit facilities, and asset management.
As of March 2021, Absa Bank Kenya PLC reported total revenues of KES 34.5 billion. That was a 2% growth, though profits after tax declined to KES 6.5 billion, a drop of 23%. However, the net customer assets grew by 7%, totaling KES 209.
13. Citibank N.A. Kenya
Citibank N.A. Kenya has been operating in Kenya since 1974 as a commercial bank. It has two branches in Kenya, one in the capital Nairobi, and the other in the city of Mombasa. Unlike other big banks, Citibank N.A. serves only corporate and Institutional customers.
Some of Citibank N.A.’s top banking services include commercial finance, investment services, deposits, electronic banking, and cash management. It currently employs 616 employees in Kenya, operates as a branch of Citibank, N.A, USA.
For the financial period ended June 30, 2021, Citibank N.A. has assets totaling KES 107.034 billion. Its liabilities were just over KES 83.208 billion. Its total profit for the same period was KES 1.629 billion. The parent company, Citigroup, Inc. is listed on the New York Stock Exchange.
14. National Bank of Kenya
The government of Kenya established the National Bank of Kenya in 1968 but then sold 32% of its stake to the public in 1994. As of April 2019, the government had sold its stake to retain a 22.5% ownership. Currently, the bank employs over 1,500 workers, has over 1,500 ATMs, and has 85 branches.
For the year ending December 31, 2020, it posted a KES 177 million in profits after tax. That was a 167% growth from the previous year. And in 2021, it posted half-year profits of KES 765 million, in the half-year ending June 30, 2021, a 307% growth from the same period the previous year.
15. Prime Bank Ltd
Prime Bank Ltd is a leading private bank that opened its doors in 1992 and currently has 23 branches. Apart from offering banking services, it also offers insurance services, through Tausi Assurance Limited. It acquired Tausi in 2017, after buying 80.72% of its shares.
Prime Bank Ltd employs 3,124 workers that serve its individual and corporate customers. It has over KES 78 billion in assets, and holds over 24,000 deposit accounts, giving it a 1.82% market share. In 2019, Prime Bank Ltd posted a KES 1.25 billion net profit, which was a 32% growth from the previous year’s KES 939.37 million.
Conclusion
Collectively these banks have been stern in contribution to Kenya’s well-developed financial sector which contributed 7% to GDP in 2016. Making it possible for Kenya to be recognized as a world leader in mobile money technology through innovations like the Agent Banking Model which functions by allowing commercial banks and deposit-taking Microfinance institutions to contract third party retail networks as Banking Agents delivering approved financial services on their behalf through the process of application, vetting, and approval.
It has since reported significant growth reaching 96% with Equity Bank recording an average number of 20,000 agents recruited since its introduction.
Kenya’s Commercial banking sector is one of the largest in Sub-Saharan Africa placing fourth after South Africa, Nigeria, and Mauritius, and is the central catalyst to Kenya’s GDP growth. Records reflect that Between January 2016 and March 2017, the banking sub-sector accounted for 60% of asset total in the financial services sector.
It’s been key in the creation of jobs, taxes, wealth facilitation, and credit access — accounting for 25% of the total loan portfolio and Government profit from tax revenue from these banks, earning over KSH 143 billion in tax returns between 2016/17 – 2017/18 financial years. These banks are the countries’ regional leaders that have a growing influence on the country’s economic diversification.
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