KCB Bank has overtaken Equity as Kenya’s largest lender by asset size due to aggressive expansion of foreign subsidiaries. KCB’s total assets reached KES 1.55 trillion, surpassing Equity’s KES 1.44 trillion. However, Equity outperformed KCB in profitability. The competition between the two banks intensifies as they focus on regional expansion and vie for dominance in the banking industry. KCB also leads in customer deposits, net customer loans, branch network, and employment in the sector.
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Kenya: Flutterwave selects Nairobi for East Africa hub
Flutterwave, the San Francisco-based African fintech company, has selected Nairobi, Kenya as its regional headquarters for East Africa, citing the country’s business-friendly environment and digital capabilities. The announcement follows the receipt of two additional licenses to operate in Rwanda, allowing Flutterwave to expand its operations in the East African nation. The company’s chief regulatory and government relations officer, Oluwabankole Falade, made the announcement during the third American Chamber of Commerce Business Summit held in Nairobi.
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Kenya: Digital lenders raise ethics questions
The number of digital lenders and loans disbursed through mobile phone apps in Kenya have grown substantially since the launch of M-Shwari in 2012. However, concerns have been raised about the largely unregulated fintech industry, with the possibility of leading to a credit crisis, particularly since debt-collecting methods like debt shaming and incessant calls are frequently used by creditors. Kenya’s Central Bank (KCB) reported that, as of November 2022, about 14 million accounts had been listed for defaulting on digital lending apps. Industry experts fear the 14 million defaulted accounts could create a bubble in the economy, leading to a credit crunch and eventually an economic recession.
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Kenya: Central Bank upgrades payment system
The Central Bank of Kenya has upgraded its Kenya Electronic Payment and Settlement System (KEPSS) by migrating the platform to new ISO 20022 message standards. This is expected to improve the exchange of financial messages by inlaying richer data on transfers and enhancing the accuracy of vetting trading parties. The upgrade is part of the National Payment Strategy 2022-2025 and aims to modernise the National Payments System to world-class standards. KEPSS is a Real Time Gross Settlement System (RTGS) which offers real-time fund transfers and simple payment processes to support large value transfers between banks.
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Kenya: KCB Bank Kenya appoints CEO
Annastacia Kimtai has been appointed as the managing director of KCB Bank Kenya, becoming the first individual to hold the position separately. She has been serving as the acting managing director and the retail banking director since December. The move is aligned with the Central Bank of Kenya’s Prudential Guidelines on Corporate Governance, which requires separation of the management of subsidiaries from that of the holding companies.
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Kenya: Egypt’s Commercial International Bank opens branch in Nairobi
Egypt’s Commercial International Bank (CIB) has opened its first branch in Nairobi, Kenya after acquiring Kenyan “Mayfair” Bank in January. The move is expected to strengthen bilateral relations between the two countries and reduce logistical obstacles for investors and businessmen on both sides. CIB is one of Egypt’s leading private sector banks and the first to enter the Kenyan market.
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Kenya: Branch Microfinance remains branchless
Branch Microfinance, which acquired Century Microfinance Bank in 2020, will continue to operate as a branchless lender, despite being a micro-bank. The neobank, which closed two of its three branches following the acquisition, will maintain a single branch to serve as its headquarters, as required by law. According to Branch International Managing Director for East Africa Rose Muturi, the neobank has over four and a half million users, who rely on its digital platform and do not need physical branches.
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Kenya: Premier Bank of Mogadishu takes over First Community Bank
First Community Bank (FCB) has revealed a core capital shortfall of more than KES1bn ($9m), leading to its owners selling a majority stake to Premier Bank Limited of Mogadishu in a rescue deal for KES2.8bn. FCB’s core capital fell from KES1.65bn in September to negative KES331m in December, triggering a breach of the Central Bank of Kenya’s capital strength ratios. FCB has been in breach of capital ratios for the past five years and customer deposits dropped by 36% to KES13.74bn from KES21.48bn a year earlier.
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Kenya: Applications open for central bank governor, deputy
Kenya has opened applications for the positions of central bank governor and deputy governor, with the tenures of the current governor and one deputy ending in June. Interested candidates have until April 19 to apply, and the positions serve four-year terms, which can be renewed once.
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Kenya: Former head of public service joins KCB board
Former Head of Public Service, Dr. Francis Kinyua, has been appointed to the Board of Directors of Kenya Commercial Bank (KCB) Group Plc, effective March 24, 2023. Kinyua has served in various senior positions in the government and has had an illustrious career spanning over 44 years in public service.
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Kenya: KCB staff count grows rapidly
KCB Group, Kenya’s largest bank by assets, increased its workforce by 2,560 employees in 2022 following the acquisition of a controlling stake in the Democratic Republic of Congo’s Trust Merchant Bank (TMB) and fresh hiring across other units. The bank’s staff costs rose 22.4% to KES30.26bn ($280m) in 2022 as a result. KCB’s total assets grew by 36.4% to KES1.55tn, helped by increased lending, investment in government securities, and growth in customer deposits and additional borrowings.
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Kenya: KCB stock slides on lower dividend payout
Shares of KCB Group Plc, Kenya’s second-largest bank, dropped as much as 9.99% in Nairobi after the lender proposed a lower dividend payout of 2 shillings per unit, down from 3 shillings the previous year. Sterling Capital attributed the lower payout to KCB Group’s low capital adequacy ratios, mainly due to the undercapitalization of subsidiary National Bank of Kenya. The bank posted 19% growth in net income to 40.6 billion shillings ($312.6 million) for last year and is targeting to lower its non-performing loans ratio to 13% this year from 17.3%.
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Kenya: Digital lending tops $4bn since 2015
Digital lenders in Kenya have disbursed a total of KES 500bn ($4.4bn) in mobile loans to households and small businesses over the past eight years, with eight million of them receiving the funds. The Digital Lenders Association of Kenya has rebranded as the Digital Financial Services Association of Kenya to attract more players in the digital lending space to deepen financial inclusion. DFSAK is looking to develop new digital financial services, such as digital insurance, digital savings plans and digital investment platforms.
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Kenya: Faster clearing services after for bank clients
Kenyan banks will offer faster clearing services for cheques, direct debits, and electronic funds transfers after upgrading the Automated Clearing House (ACH) to the ISO 20022 standard. The upgrade is expected to reduce processing errors and improve turnaround times in electronic funds transfers, and unlock opportunities for banks and other financial sector players. The ISO 20022 is a global standard for electronic messaging between financial institutions.
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Kenya: Ruto appoints deputy governor of central bank
Kenya’s President William Ruto has appointed Susan Koech, a former banker and senior government official, as the second deputy governor of the central bank, a role that has been unoccupied for over five years. The appointment comes ahead of the end of current Governor Patrick Njoroge and Deputy Governor Sheila M’mbijiwe’s terms in June, and legal experts have suggested that Koech could serve as acting governor if replacements have not been found by that point.
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Kenya: Standard Bank plans to grow through acquisition
Standard Bank is looking to expand its operations in East Africa by acquiring one of Kenya’s banks by 2025. This move is part of the bank’s strategy to increase its footprint in the region, which has a growing population and economy. As Africa’s largest lender by assets, Standard Bank is likely to face competition from other major banks looking to enter the East African market.
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Kenya: Somalia’s Premier Bank takes over First Community Bank
Somalia’s Premier Bank has acquired a 62.5% stake in Kenya’s shariah-compliant First Community Bank for KSh 2.8 billion. The deal was approved by the Competition Authority of Kenya and is aimed at boosting the capital levels of the troubled lender, which is currently in breach of the Central Bank of Kenya’s regulations. The remaining stakeholders will hold a 37.5% share in the bank.
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Kenya: Central Bank freezes interest hikes by private banks
The Central Bank of Kenya has put a hold on major banks’ request to increase loan costs for borrowers. Six out of nine tier-1 banks have yet to receive approval for their new loan pricing formulas, which will set interest rates when the government stops controlling loan costs. The freeze has protected most borrowers, particularly those in the informal sector.
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Kenya: Nigerian fintech Umba starts offering digital banking services
Umba, a Nigerian fintech company, has launched its digital banking services in Kenya following the acquisition of a controlling stake in Daraja Microfinance Bank. Umba is now the second licensed digital bank in Kenya and is offering complete banking solutions including opening and operating current, interest-bearing savings, and fixed deposit accounts, as well as lending and payments services. The company sees Kenya as a significant untapped market due to the more rigorous licensing regulations in place, and has raised $18m in funding to date.
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Kenya: KCB continues partnership with Sopra to drive digital offering
KCB Bank Kenya has teamed up with Sopra Banking Software to enhance its digital banking offering. Sopra will design, build and support the bank’s lending and savings product portfolio, via its KCB Vooma platform. Since 2020, the bank and fintech provider have been developing and launching digital products together, including savings and loan offerings for customers. KCB Bank Kenya claims to have distributed loans worth $3bn to 11 million customers since October 2018.
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Kenya: JP Morgan Chase opening third regional office in Africa
JP Morgan Chase & Company is opening a regional office in Nairobi, Kenya, following plans that were set in motion in 2018. The move is seen as a vote for Kenya’s emerging success in the global marketplace, and the bank is thought to be targeting US multinationals entering the region, as well as wealth funds and universities. The establishment of a regional office is expected to generate employment opportunities and encourage an influx of foreign investment to Kenya. The bank already operates regional offices in South Africa and Nigeria.
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Moody’s: Outlook for African banking sector is stable
Moody’s Investors Service predicts that African banking systems will remain deposit-funded and liquid, which will support financial stability in most countries. However, foreign currency liquidity will still pose a challenge for Nigerian and Egyptian banks. The banking sector outlooks for Nigeria, Egypt, Kenya, and The West African Economic and Monetary Union remained stable, while those for South Africa and Morocco were revised from negative to stable, thanks to their steady deposit-based funding structure, capital, and profitability despite a challenging operating environment.
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Kenya: National Bank appoints new managing director
George Odhiambo has been appointed as the new Managing Director of the National Bank of Kenya (NBK), replacing Peter Kioko who held the position in an acting capacity. George is a seasoned banker and outgoing MD of BPR Bank Rwanda PLC. He previously served as the MD of KCB Bank Rwanda and has held various leadership roles in banks locally and internationally. NBK is a subsidiary of KCB Group, which fully acquired the NBK brand in October 2019.
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Kenya: Nigerian digital bank Umba launches services
Nigeria-based digital bank Umba has launched its services in Kenya, following its acquisition of a majority shareholding in Daraja Microfinance Bank. The bank offers a range of services including current accounts, savings accounts, fixed deposit accounts, lending, and payments, with a focus on serving Africa’s underserved market. Umba aims to offer a transparent, low-fee service, and has strong backing from leading fintech investors including Costanoa Ventures and Monzo founder Tom Blomfield.
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Kenya: Ruto nominates deputy governor of central bank
Susan Koech, a career banker, has been nominated by Kenyan President William Ruto to be the second deputy governor of the central bank. The post has been vacant for more than five years, but with the current governor and one deputy’s terms set to expire in June, Koech could serve as acting governor if new appointments are not made. Koech’s nomination has to be approved by the Kenyan Parliament.