Who Owns Whom

The Banking Industry in Kenya

Gary Phillips | Kenya | 18 November 2021

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The Banking Industry in Kenya

Most assets in Kenya’s banking industry are held by commercial banks, and among these, most are held by the country’s 10 listed companies, half of which are foreign-owned. The Kenyan banking industry is widely held to be overbanked, and large banks are being driven by intensely competitive and low-margin conditions to consolidate through mergers and acquisitions and to become fully regionalised.

Digital Disruption

The traditional branch, ATM and agent network model is being disrupted by digital banking services that are changing how commercial banks reach their customers. The majority of banking transactions in Kenya take place outside branches, and digital and mobile banking can be rolled out at a fraction of the cost of branches, ATMs and even agents, enabling commercial banks to expand to previously unreached consumers while reducing costs and improving income through digitisation and mobile banking investments.

Consolidation

The Kenyan banking industry has been consolidating over the past few years. After a loan restructuring period and the subsequent restoration of net interest revenue and profitability, well-capitalised large commercial banks are expected to continue to consolidate locally and acquire small banks on low valuations, expand into the region and pursue digital banking to lower costs and win back small business and household customers lost to non-bank competitors in recent years.

Report Coverage

This report covers the Kenyan banking industry, focusing on commercial banks and also including the central bank, microfinance and mutual funds such as local credit and savings unions and community-based financial services associations. It includes comprehensive information on the size and state of the industry, the performance and developments of major industry players, corporate actions and industry developments. There are profiles of 56 companies including notable commercial banks such as Standard Chartered, Stanbic, Equity Bank and KCB Group, smaller banks including Paramount and Middle East Bank and microfinance banks such as Faulu and Muungano.

Table of Contents

PAGE
1. INTRODUCTION 1
2. COUNTRY PROFILE 1
2.1. Geographic Position 8
3. DESCRIPTION OF THE INDUSTRY 10
3.1. Industry Value Chain 16
3.2. Size of the Industry 17
3.3. Key Success Factors and Pain Points 33
4. LOCAL 34
4.1. Key Trends 34
4.2. Notable Players 39
4.3. Corporate Actions 49
4.4. Regulations 51
4.5. Enterprise Development and Social Development 54
5. AFRICA 57
6. INTERNATIONAL 59
7. INFLUENCING FACTORS 61
7.1. COVID-19 61
7.2. Economic Environment 62
7.3. Labour 64
7.4. Technology, R&D and Innovation 66
7.5. Input Costs 68
7.6. Kenya’s Credit Rating 70
8. COMPETITIVE ENVIRONMENT 72
8.1. Competition 72
8.2. Barriers to Entry 73
9. SWOT ANALYSIS 74
10. OUTLOOK 75
11. INDUSTRY ASSOCIATIONS 76
12. REFERENCES 76
12.1. Publications 76
12.2. Websites 77
COMPANY PROFILES 84
Absa Bank Kenya PLC 84
Access Bank (Kenya) PLC 92
African Banking Corporation Ltd 95
Bank of Africa Kenya Ltd 98
Bank of Baroda (Kenya) Ltd 101
Bank of India Kenya (Kenya branch of Bank of India) 104
Caritas Microfinance Bank Ltd 106
Central Bank of Kenya 108
Century Microfinance Bank Ltd 111
Choice Microfinance Bank Ltd 113
Citibank Kenya (Kenya branch of Citibank N.A.) 115
Co-operative Bank of Kenya Ltd (The) 117
Consolidated Bank of Kenya Ltd 124
Credit Bank PLC 127
Daraja Microfinance Bank Ltd 130
Development Bank of Kenya Ltd 131
Diamond Trust Bank Kenya Ltd 133
DIB Bank Kenya Ltd 138
Ecobank Kenya Ltd 140
Equity Bank (Kenya) Ltd 143
Family Bank Ltd 145
Faulu Microfinance Bank Ltd 151
First Community Bank Ltd 154
Guaranty Trust Bank (Kenya) Ltd 157
Guardian Bank Ltd 160
Gulf African Bank Ltd 163
Habib Bank Kenya (Kenya branch of Habib Bank AG Zurich) 166
HFC Ltd 168
I&M Bank Ltd 170
KCB Group PLC 175
Kenya Women Microfinance Bank PLC 179
KEY Microfinance Bank PLC 183
Kingdom Bank Ltd 185
M Oriental Bank Ltd 188
Maisha Microfinance Bank Ltd 191
Mayfair CIB Bank Ltd 193
Middle East Bank Kenya Ltd 196
Muungano Microfinance Bank PLC 199
NCBA Group PLC 201
Paramount Bank Ltd 205
Prime Bank Ltd 207
Rafiki Microfinance Bank Ltd 210
RentWorks East Africa Ltd 212
SBM Bank (Kenya) Ltd 213
Sidian Bank Ltd 216
Simba Corporation Ltd 219
SMEP Microfinance Bank Ltd 222
Spire Bank Ltd 225
Stanbic Bank Kenya Ltd 227
Standard Chartered Bank Kenya Ltd 231
Sumac Microfinance Bank Ltd 236
U & I Microfinance Bank Ltd 238
UBA Kenya Bank Ltd 240
Uwezo Microfinance Bank Ltd 242
Vehicle and Equipment Leasing Ltd 244
Victoria Commercial Bank Ltd 246