Kenya's Largest Bank Reports Record £530 Million Profit Despite Economic Headwinds

2026-03-11 region

Nairobi, 11 March 2026
KCB Group, East Africa’s biggest lender, achieved remarkable financial resilience by posting £530 million net profit for 2025—an 11% increase despite sluggish economic conditions. The bank’s success stemmed from strategic cost-cutting measures, including a 3% reduction in operating expenses, and the profitable sale of National Bank of Kenya to Nigeria’s Access Bank. Most striking is the bank’s digital transformation: nearly all customer transactions now occur outside branches, with mobile lending disbursements reaching £6.6 million daily. Regional diversification proved crucial, with subsidiaries outside Kenya contributing 30% of total profits, demonstrating how African banks are adapting to challenging market conditions through operational efficiency and technological innovation.

Strategic Divestiture Drives Cost Efficiency

The bank’s strategic decision to divest National Bank of Kenya proved financially astute, generating a KES 3.18 billion (£24.5 million) gain recorded under other income when the sale completed in May 2025 [2]. This divestiture formed part of broader cost discipline measures that saw operating costs fall approximately 3% to KES 90.5 billion (£698 million) [2]. The bank’s cost-to-income ratio improved markedly, dropping to 42.5% from 45.4% in the previous year [7][8], whilst operating expenses declined by 2.5% [7][8]. These efficiency gains demonstrate how Kenya’s banking sector is adapting to economic pressures through balance sheet restructuring and expense management.

Robust Balance Sheet Growth Despite Challenging Environment

Despite the disposal of National Bank of Kenya, KCB Group’s balance sheet continued expanding, with total assets rising 9.3% to KES 2.15 trillion (£16.6 billion) [2][7][8]. Customer deposits climbed 15% to KES 1.59 trillion (£12.3 billion) [2][7][8], reinforcing the lender’s funding base across East African markets. Gross loans and advances increased 16.2% to KES 1.25 trillion [8], whilst customer loans grew 15% to the same figure [8]. This expansion occurred despite borrowers struggling with high interest rates and slower economic growth [2], highlighting the bank’s ability to maintain lending growth in challenging conditions.

Digital Transformation Accelerates Transaction Volumes

The bank’s digital lending strategy showed remarkable momentum, with loans issued through mobile channels rising 30% during 2025, equivalent to roughly KES 1.1 billion (£8.5 million) disbursed daily [2]. Nearly all customer transactions now occur outside traditional branches, as the bank successfully migrated services to mobile and online platforms [2]. This digital-first approach has become crucial for maintaining customer engagement whilst reducing operational costs. The transformation reflects broader trends across African banking, where mobile financial services are driving both customer acquisition and operational efficiency.

Regional Diversification Strengthens Earnings Profile

KCB’s expansion beyond Kenya continued delivering substantial returns, with subsidiaries outside the home market accounting for approximately 30% of the group’s balance sheet and profits [2]. More precisely, subsidiaries excluding KCB Bank Kenya contributed 30.7% of the group’s profit before tax and 30.5% of the group balance sheet [7][8]. Non-banking subsidiaries demonstrated particularly strong performance: KCB Bancassurance Intermediary achieved KES 1.14 billion profit before tax with 29% growth, KCB Investment Bank delivered KES 348 million representing a 31% increase, and KCB Asset Management posted KES 160 million with 54% growth [7][8]. This diversification strategy has proven essential as competition intensifies in Kenya’s domestic banking market.

Asset Quality Improvements Signal Economic Stabilisation

The bank’s asset quality showed encouraging improvement, with the non-performing loans ratio declining to 16.9% from 19.2% in the previous year [8]. Gross non-performing loans fell to KES 211.8 billion from KES 225.7 billion [8], suggesting either improved borrower conditions or more effective loan recovery processes. The bank maintained robust capital ratios, with core capital at 18.4% of risk-weighted assets and total capital ratio at 22.1% [8]. Return on equity reached 22.5% whilst return on assets stood at 3.3%, with shareholder funds rising to KES 331 billion [8]. These metrics indicate financial stability that could support continued lending growth.

Shareholder Returns Reflect Confidence in Future Performance

The board proposed a final dividend of KES 3 per share, complementing the interim dividend of KES 4 per share paid in November 2025 [7][8]. This brings the total dividend payout to KES 7 per share, equivalent to KES 22 billion (£170 million) returned to shareholders [2][7][8]. Total revenues increased to KES 214 billion from KES 204 billion, with non-funded income contributing 31% of total revenues [7][8]. Net interest income reached KES 148.02 billion, representing a 7.8% year-on-year increase [5]. As KCB Group Chairman Dr. Joseph Kinyua noted: “Looking ahead, we are optimistic about sustained business activity and economic growth prospects this year across the markets we operate in” [8], suggesting management confidence in continued performance through 2026.

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banking economy