Why Zenith, Access, other Big African Banks are Racing to Kenya

East Africa is rapidly emerging as the new battleground for Africa’s banking heavyweights, with Kenya at the centre of an intensifying expansion race that is reshaping the continent’s financial landscape.

In just one week, two major announcements underlined the shift. 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.

They join a growing list of pan-African banks deepening their Kenyan footprint. Access Holdings, Nigeria’s largest banking group by assets, completed the acquisition of National Bank of Kenya (NBK) from KCB Group in 2025, after earlier buying Transnational Bank — now Access Bank Kenya — in 2020. Last year, Dubai-based Soren Investment Company acquired Gulf African Bank, Kenya’s largest Islamic lender.

These moves reflect a broader recalibration in African banking strategy. While Ethiopia’s recent liberalisation 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

“Nedbank pushes into a Kenya bank deal that was expected, with Standard Bank long seen as the likely buyer,” said Charles Robertson, head of macro-strategy at FIM Partners, on social media platform LinkedIn.

Robertson added that South African interest in Kenya aligns with his “Time-Travelling Economist” thesis that “Kenya will be the next African country to industrialise and take off, after Egypt, and the first in sub-Saharan Africa since Mauritius.”

“At about $0.9 billion, the deal is equivalent to roughly 0.6 percent of Kenya’s GDP, making it a meaningful boost to Foreign Direct Investment,” the renowned emerging and Frontier markets specialist said.

Kenya has been eager for such inflows. UN Trade and Investment data show that FDI into East Africa’s biggest economy slipped marginally by 0.1 percent to $1.503 billion in 2024, from $1.504 billion a year earlier. Large bank entries help offset that softness while reinforcing confidence in the country’s financial system.

Currency stability and macro reset

The timing of the bank inflows is notable. After suffering its worst depreciation in more than three decades, the Kenyan shilling has stabilised sharply. Bloomberg data show the currency lost 21 percent against the dollar in 2023, its steepest fall since 1993, before rebounding strongly in 2024.

Having weakened past KSh160/$ in January 2024, the shilling ended the year with a 17.4 percent appreciation and has traded in a relatively stable KSh128–131/$ range through 2025.

To arrest the earlier slide, the Central Bank of Kenya (CBK) raised its benchmark rate by 200 basis points to 12.5 percent in December 2023, the biggest hike since 2011. As pressures eased, the rate was gradually cut to 9.5 percent by August 2024 and 9.0 percent in December, its lowest level in two years.

Yet stability has also drawn scrutiny. Last October, the International Monetary Fund described the shilling as “excessively stable,” questioning whether it fully reflected market forces. This assessment underscores the delicate balance Kenyan authorities are trying to maintain.

Regulation opens the door

A critical regulatory shift has reinforced Kenya’s appeal. Last year, the country lifted a 10-year moratorium on new commercial bank licences, imposed in 2015 after governance failures rattled the sector. The freeze had reduced the number of banks from 44 to 38.

New entrants now face a significantly higher minimum capital threshold of KSh10 billion (about $77 million)—a barrier that favours large, well-capitalised regional lenders and helps explain the surge in acquisition-led entry.

At the same time, several foreign banks have retreated. Bank Al Habib closed its representative office in late May, while groups such as Credit Suisse, Barclays, and Atlas Mara have scaled back or restructured African operations.

A recent Moody’s report noted that many Western banks that once viewed Africa as “the next frontier” were disappointed by returns. “Profitability, when adjusted for currency movements and capital weighting, has often fallen short of expectations,” the global rating agency said.

A fintech powerhouse

The country’s most compelling draw, however, lies in its digital financial ecosystem. With a population nearing 60 million, it is globally recognised as a fintech pioneer. Mobile money platforms such as M-Pesa and Airtel Money have pushed financial inclusion to record levels.

By 2024, 90.1 percent of adults were banked, overtaking Mauritius as the African country with the highest banked population, according to the World Bank. About 93 percent owned a mobile phone, 60 percent accessed the internet, and 89 percent made or received digital payments.

For pan-African banks, Kenya offers a ready-made laboratory for digital lending, payments, neobanking and data-driven credit—far beyond traditional branch-based banking.

That advantage is already showing up in brand strength. According to global market research firm Brand Finance, Kenya’s three biggest lenders—Equity Bank, KCB Group and Co-operative Bank—posted the highest brand-value growth in Africa last year, rising 25.1 percent to $1.18 billion. This outpaced South Africa, Egypt and Nigeria.

“The banking sector contributes over half of the ranking’s total brand value, underscoring its central role in Kenya’s economy,” Brand Finance said.

Profits follow growth

Kenya’s macro backdrop has also improved as Gross Domestic Product expanded 4.9 percent year-on-year in Q3 2025, up from 4.2 percent a year earlier, while inflation stood at 4.5 percent in December, within the CBK target. The IMF projects 4.9 percent growth in 2026, while the government is targeting 5.6 percent.

Listed banks on the Nairobi Securities Exchange are already benefiting. Combined pre-tax profits of 11 lenders rose by 10 percent to KSh269.0 billion ($2.07 billion) in the first nine months of 2025, while after-tax earnings climbed 10.8 percent to KSh205.0 billion ($1.58 billion).

Equity Group led with KSh65.6 billion ($505 million) in pre-tax profit, up 28.5 percent, followed by KCB Group with KSh62.1 billion ($478 million). Co-operative Bank posted KSh30.0 billion ($231 million). But some foreign lenders struggled. Standard Chartered’s pre-tax earnings fell by 41.2 percent to KSh13.20 billion, and Stanbic Holdings saw pre-tax earnings decrease 8.3 percent.

“The shilling’s stability, improved foreign exchange inflows, and stronger reserves translated into better funding conditions and higher profits,” analysts at Abojani Investment said at a recent webinar on the banks’ Q3 reports, noting that banks are increasingly using technology to cut costs and diversify income.

Gateway to a larger region

Kenya’s strategic value extends beyond its borders. As the commercial hub of the East African Community, it offers 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 with lower friction—an advantage that becomes even more important as Ethiopia opens up.

Ethiopia’s banking liberalisation—the first in half a century—has already lifted local lenders the African rankings. Awash International Bank, Bank of Abyssinia, and Dashen Bank were among the biggest climbers in African Business Magazine’s Top 100 African Banks 2025 list.

With more than 130 million people and an IMF-projected average growth of 7.4 percent between 2025 and 2030, the country represents the next frontier. A Kenyan base provides the springboard.

A race no one wants to lose

When one major bank moves, others follow. Nedbank’s NCBA deal and Zenith’s approval are not isolated bets—they signal a competitive rush. Nigeria’s largest lenders, from Access Bank to First Bank, are already positioning themselves.

Access Holdings’ latest results underscore why. Markets that were previously loss-making—including Kenya, Mozambique, and South Africa—swung from a combined N9.87 billion loss ($6.7 million) to a N16.9 billion profit ($10.9 million) in the first half.

For Kenya, the influx promises deeper financial inclusion, more competition, and greater innovation. For local banks, it raises the stakes—some may become acquisition targets themselves.