African Banks Expand Operations in Kenya

East Africa is rapidly emerging as a new battleground for Africa’s banking heavyweights, with Kenya at the center of an intensifying expansion race reshaping the continent’s financial landscape. In just one week, South Africa’s Nedbank Group revealed plans to acquire a 66 percent stake in NCBA, one of Kenya’s top lenders, while Nigeria’s Zenith Bank secured regulatory approval to enter the market through the acquisition of 100 percent of Paramount Bank.

These moves reflect a broader recalibration in African banking strategy. While Ethiopia’s recent liberalization has attracted strong interest, Kenya remains the crown jewel, offering scale, regulatory depth, fintech sophistication, and regional access unmatched elsewhere in East Africa.

A Calculated Bet on Kenya

Charles Robertson, head of macro-strategy at FIM Partners, noted on LinkedIn that South African interest in Kenya aligns with his “Time-Travelling Economist” thesis, predicting Kenya will be the next African country to industrialize after Egypt and the first in sub-Saharan Africa since Mauritius. He added that the $0.9 billion deal is equivalent to roughly 0.6 percent of Kenya’s GDP, representing a meaningful boost to Foreign Direct Investment. Kenya has been eager for such inflows, as FDI slipped marginally by 0.1 percent to $1.503 billion in 2024.

Currency Stability and Macro Reset

The timing of the bank inflows is notable. After a significant depreciation in 2023, the Kenyan shilling has stabilized sharply. Bloomberg data show the currency lost 21 percent against the dollar in 2023, its steepest fall since 1993, before rebounding strongly in 2024. The Central Bank of Kenya (CBK) raised its benchmark rate to 12.5 percent in December 2023, and subsequently cut it to 9.0 percent in December, its lowest level in two years.

Regulation Opens the Door

Last year, Kenya lifted a 10-year moratorium on new commercial bank licenses, imposed in 2015. New entrants now face a higher minimum capital threshold of KSh10 billion (about $77 million), favoring large, well-capitalized regional lenders. Several foreign banks have retreated, including Bank Al Habib, Credit Suisse, Barclays, and Atlas Mara.

A Fintech Powerhouse

Kenya is globally recognized as a fintech pioneer, with mobile money platforms like M-Pesa and Airtel Money driving financial inclusion. By 2024, 90.1 percent of adults were banked, surpassing Mauritius as the African country with the highest banked population. About 93 percent owned a mobile phone, 60 percent accessed the internet, and 89 percent made or received digital payments. This advantage allows pan-African banks to explore digital lending, payments, neobanking, and data-driven credit.

Profits Follow Growth

Kenya’s macro backdrop has improved, with Gross Domestic Product expanding 4.9 percent year-on-year in Q3 2025. Inflation stood at 4.5 percent in December, within the CBK target. Listed banks on the Nairobi Securities Exchange saw combined pre-tax profits rise by 10 percent to KSh269.0 billion ($2.07 billion) in the first nine months of 2025. Equity Group led with KSh65.6 billion ($505 million) in pre-tax profit, up 28.5 percent.

Gateway to a Larger Region

Kenya’s strategic value extends beyond its borders as the commercial hub of the East African Community, offering access to a market spanning Tanzania, Uganda, Rwanda, Burundi, South Sudan, and the Democratic Republic of Congo. A strong Kenyan platform allows banks to scale regionally, particularly as Ethiopia opens up its banking sector.

A Race No One Wants to Lose

Nigeria’s largest lenders are positioning themselves, and Access Holdings’ latest results demonstrate the potential for profitability in previously loss-making markets. The influx promises deeper financial inclusion, more competition, and greater innovation in Kenya.

Bunmi Bailey is Assistant Editor, Finance (Africa), at BusinessDay. She holds a degree in Economics from the University of Lagos and has over eight years of experience in content writing and journalism. Her career spans roles as a financial and business journalist at BusinessDay Media and TechCabal, and as Head of Research at SBM Intelligence, an Africa-focused market intelligence and strategic consulting firm. She also served as Editor at Finance in Africa, a subsidiary of Businessfront.