Kenya’s nine largest commercial banks firmed their dominant position last year as their combined market share rose to 76.6pc last year from 75.1pc.
The Central Bank of Kenya (CBK) 2023 Annual Banking Supervision Report indicates that the large banks recorded an increase in their net assets, total deposits, capital and reserves even though there was a dip in profitability.
During the year under review, the large banks total assets rose by 19.1pc, from Ksh 4.97 trillion in 2022 to Ksh 5.92 trillion at the end of last year. The banks accounted for 77pc of total assets in the banking sector which increased to Ksh 7.7 trillion.
“The total net assets in the banking sector stood at Ksh 7.7 trillion as at December 31, 2023, compared to Ksh 6.6 trillion as at December 2022, recording a growth of 16.7pc. There were 20 operating local private commercial banks and 2 operating local public commercial banks, which accounted for 69.2pc and 0.4pc of total net assets respectively,” CBK stated in the report.
According to the bank, combined market share of eight banks in the medium peer group decreased to 15pc in December 2023, from 16.3pc in December 2022, while that of 22 banks categorized as small declined from 8.6 in 2022 to 8.4pc last year.
At the end of last year, KCB Group emerged as the largest bank by assets which rose to Ksh 1.4 trillion followed by Equity Bank with Ksh 1 trillion, NCBA Bank Ksh 661.7 billion and Co-operative Bank Ksh 624.3 billion.
Absa Bank emerged fifth largest bank with an asset base of Ksh 520.3 billion followed by StanChart Bank with Ksh 429.3 billion, Stanbic Bank 449.6 billion, I&M Bank Ksh 405.6 billion and Diamond Trust Bank with an asset base of Ksh 399.6 billion.
Out of 39 banks operating in Kenya, 17 were foreign owned and accounted for 30.3pct of the sector’s total assets.
The banking industry however faced headwinds which impact profitability. Gross profits declined by 8.8pc from Ksh 240.4 billion in December 2022, to Ksh 219.2 billion in December 2023.
“The decrease in profitability was attributed to a higher increase in total expenses of Ksh.175.3 billion compared to the increase in total income of Ksh 154.1 billion,” said CBK.
Large banks share of profits went down to 84.7pc of the total pre-tax profit in from 86.7pc recorded in 2022. On the other hand, small peer group proportion of total pre-tax profit increased from 1.2pc in 2022, to 1.7pc in 2023 while medium banks shared increased to 13.6pc from 12.1pc.
However, the banking sector capital and reserves increased by 6.8pc to Ksh 980.2 billion in December 2023, from Ksh 917.6 billion in December 2022.
“All the peer groups registered increased capital and reserves. The increase in capital and reserves is attributable to additional capital injections by commercial banks as well as retained earnings from the profits realized in the year,” CBK stated.
Industry total deposits surged by 18pc to Ksh 5.9 trillion from Ksh 5 trillion, driven by increased mobilization of deposits through digital platforms.
