Kenya is the financial hub of Eastern Africa

 

The Financial Market in East Africa is gradually being indigenized, we can report. In Kenya and Tanzania, indigenous banks have taken over the domestic market, shunting foreign banks to the periphery.

We can also report that Kenya is the financial hub of Eastern Africa, an analysis of the H1 2024 financial reports of the leading banks shows.

Their Asset base is also growing, meaning they are entrenched in the market.  Generally, the Capital base for all top banks has doubled in the last five years.

In 2019, Kenya’s KCB had a capital base of US$8.6 billion. As at the end of H1 2024, the capital base stood at $17.17 billion, while Equity’s asset base grew from US$6.8 billion in 2019 billion to $13.7 billion in the first half of this year.

In Tanzania, CRDB has more than doubled its asset base from $2.52 billion in 2019 to the current $5.7 billion, while NMB, the second largest bank in Tanzania, has seen its asset base grow from $2.36 billion in 2019 to the current $5.07 billion. These two banks combined, control 43 percent of the Tanzania financial market.

 Locally incorporated Banks control up to 50 percent of the local market, occupying the first three to four top slots in both countries.  The leading Banks are KCB Africa Group, Equity Bank Group, NCBDA, Co-op Bank, and DT Bank Africa group in Kenya. In Tanzania, the leaders are CRDB, NMB, and NBC in that order.

The Tanzanian banks are yet to venture out of the domestic market. Their Kenyan counterparts, however, are in several countries in the East Africa Common Market where they hold a significant share of the market.  The other EACM countries are Uganda, DR Congo, Rwanda, Burundi, and South Sudan.

Even though, the top two banks in Kenya-KCB and Equity- control 31.5 percent of the local market, they have a dominant presence in the four other countries except Tanzania, where they hold the bottom slot.

Despite this, however, the top two Kenyan banks, KCB and Equity, are behemoths that dwarf the competition. For instance, Equity’s asset base is larger than the three top banks in Tanzania combined. All three, CRDB, NMB, and NBC combined have an asset base of around US$12.3 billion compared to Equity’s $13.7 billion.

KCB also dwarfs the competition in Kenya, excluding Equity Bank. The other three top banks- NCBA, Co-op Bank, and DTB Africa combined boast an asset base of nearly $15 billion compared to KCB’s $17.17 billion.

 The two banks are as rich as some countries in the region in terms of GDP. In fact, KCB’s asset base is 123 percent of the size of Rwanda’s GDP in 2023, while Equity is just slightly lower, at 98 percent.

 KCB still holds the top perch with a capital base of KES 2 trillion (US$17.17 billion) as of the end of June 2024 while Equity boasts KES 1.75 trillion ($13.6 billion) at the current rates, over the same period.