Top Commercial Banks in Kenya

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Commercial Banks in Kenya

The Central Bank of Kenya is the chief regulator of the banking sector and classifies banks according to their asset base. They are either tier 1, tier 2 or tier 3.

Out of the three, tier 1 banks are the creme de la creme and can wither a financial storm. 

Here is a list of the top commercial banks in Kenya.

1) Kenya Commercial Bank

KCB traces its journey from 1896 when it began as a branch of the National Bank of India in Mombasa. In 1958, it merged with Grindlays Bank to form the National and Grindlays Bank.

When the country gained independence, 60% of its shares were acquired by the government.

And in 1970, the government bought the other 40% of shares and gained full control of the bank. It then renamed it to Kenya Commercial Bank Group. 

Today, KCB is the bank with the largest asset base in Kenya making it the number 1 tier 1 bank in Kenya.

Its assets stand at KES 898.6 billion, and it aims to have an asset base of KSh1 trillion by 2022.

2) Equity Bank Kenya

This bank started as a building society in 1984, and at the time it was called Equity Building Society (EBS). 

Unfortunately, since its inception in 1984 up to 1993, it experienced a stagnant deposit base, stagnant loan base, a deteriorating loan portfolio, and losses amounting to 5 million annually.

In 1993, when the bank was going under receivership, the management at the time invited James Mwangi to steer the financial institution from insolvency.  

Dr.Mwangi was able to turn around the society, and by 1997 EBS was paying annual dividends. And as of 31 August 2004, Equity Building Society became Equity Bank Kenya. 

Today the bank is classified as a tier 1 bank with an asset base of KSh 703 billion, as of its third-quarter 2019. Equity Bank also boasts of having the largest customer base in Kenya.

3) NCBA Bank Kenya

Founded in 1962 in Tanzania, it quickly opened branches in Kenya and Uganda. However, it later closed in 1967 in Tanzania following the nationalization of all private banks. And in 1971, it closed shop in Uganda due to the political situation at the time.

After the melee in Tanzania, it shifted its headquarters to Nairobi.

In the beginning, CBA was owned by a consortium of financial institutions known as Société Financière pour les Pays d’Outre-Mer (SFOM), which was based in Switzerland.

The group consisted of Banque Nationale de Paris, Bank Bruxelles Lambert, Commerzbank, and Bank of America

In 1980, Bank of America bought 84% of shares consequently buying out all the other partners, and the other 16% remained in the hands of Kenyan investors.

In the late 80s, Bank of America disinvested from the bank, effectively putting 100% shareholding of CBA in the hands of Kenyans.

As of September 30,2019 Commercial Bank of Africa (CBA) and NIC bank merged and began operating as NCBA Bank Kenya. 

After the merger, they had a combined market share of 9.9%, and became the third-largest bank in Kenya. As of September 2019, NCBA’s total asset base was valued at KSh487.8 billion.

4) Cooperative Bank of Kenya

This bank has its roots in the co-operative movement. It was started in 1965, and registered under the Co-operative Societies Act.

In 1968, it acquired its banking license, and the Government of the day directed all cooperative societies to transfer their deposits to the society and buy its shares.

 Twenty years later in 1989, it converted to a fully-fledged commercial bank. On 22nd December 2008, it was listed on the Nairobi Securities Exchange.

The shares held by 3,805 co-operative societies were ring-fenced, and are now under CoopHoldings Co-operative Society Limited, and have a 64.56% stake in shares

The bank today is a tier 1 bank with an asset base of Sh457 billion as for the year ended December 31, 2019.

5) Absa Bank Kenya PLC

This bank traces its history from South Africa when in 1916, the National Bank of South Africa opened its first branch in Mombasa.

Later on, in 1925, the National Bank of South Africa merged with Anglo-Egyptian Bank and the Colonial Bank to form Barclays Bank. The Kenyan operations came under Barclays Bank.

In 1978 it was incorporated as Barclays Bank of Kenya, a subsidiary of Barclays Bank International. Thereafter, in 1986 it floated its IPO, and its shares were listed on the Nairobi Stock Exchange

In 2013, all Barclays Plc business in Africa merged under the Absa Group Limited, and as of 10 February 2020, rebranded to Absa Bank Kenya

Its business units include retail, corporate, treasury, and card services.

As of December 2019, the bank has an asset base of KSh374.109 billion and is still a tier 1 bank despite rebranding.

6) Diamond Trust Bank

Founded in 1946, DTB is an affiliate of the Aga Khan Development Network (AKDN). Its focus has been on the SME sector and has branches in Kenya, Uganda, Tanzania, and Burundi.

In July 2017, the Diamond Trust Bank Group acquired Habib Bank Kenya. Today the bank has an asset base of 386 billion as of financial year ended 31 st December 2019.

7) Standard Chartered Bank Kenya

Standard Bank of British South Africa set up shop in Kenya in 1911. It started with two branches; one in Nairobi, and another in Mombasa. 

In 1969, Standard Bank of South Africa merged with Chartered Bank of India, Australia, and China forming the Standard Chartered Bank. The bank then changed its name to Standard Chartered Bank of Kenya. 

Later in 1987, Standard Bank of South Africa disinvested completely from the group and sold all its shares.

Two years later in 1989, it was listed on the Nairobi Securities Exchange. It offered 21 million shares to the public, which was the largest single placing at the NSE at the time.

Today the bank is a tier 1 bank with an asset base of Ksh 302 million as of the end of the financial year 31st December 2019.

Other Commercial Banks in Kenya

ABC Bank (Kenya), Bank of Africa, Bank of Baroda, Bank of India, Citibank, Credit Bank, Dubai Islamic Bank, Ecobank Kenya, Family Bank, First Community Bank, Guaranty Trust Bank Kenya, Guardian Bank, Gulf African Bank, Habib Bank AG Zurich, Housing Finance Company of Kenya, I&M Bank, Imperial Bank Kenya, Jamii Bora Bank, Mayfair Bank , Middle East Bank Kenya, M Oriental Bank, National Bank of Kenya, Paramount Universal Bank, Prime Bank (Kenya), SBM Bank Kenya Limited, Sidian Bank, Spire Bank, Stanbic Bank Kenya, Standard Chartered Kenya, Transnational Bank, United Bank for Africa, Victoria Commercial Bank

For more details on Bank Products in Kenya, Kindly contact finsolutions.co.ke, +254725157969

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About Author

Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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