The Banking Industry in Kenya 2021

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.