KCB Group and Equity Group were ranked among the top 10 banks in Africa, with high stocks of non-performing loans being the only blemish in their performance.
KCB was ranked third overall, while Equity was fifth in a ranking conducted by The Banker, a Financial Times publication.
The rankings are pegged on different metrics, including the size of a bank’s tier one capital, profitability, growth, liquidity, operational efficiency, return on risk and asset quality.
The two banks were among the top 10 banks on the continent in all metrics except asset quality.
The Banker defines asset quality as a measure of bad debts compared to the total loan book. The loan loss provisions made by a bank in comparison to its profitability are also considered in defining asset quality.
“We have developed a model that scores and ranks banks in eight key performance categories, using 17 ratios, and assigns an overall best-performing bank score and ranking,” said The Banker.
“The model only uses performance ratios and year-on-year percentages and basis points changes, so the size of a bank has no influence on its best bank ranking position,” added The Banker.
Guaranty Trust Bank of Nigeria, which also operates in Kenya, was ranked first, with Capitec Bank of South Africa second.
Commercial International Bank of Egypt, which entered Kenya in 2023 after acquiring Mayfair Bank, ranked fourth.
KCB and Equity outperformed larger banks on the basis of better financial ratios, ranking 13th and 15th on the continent based on the size of their tier one capital.
“KCB, Kenya’s largest bank, posted a 54.9 percent increase in tier one capital in dollar terms for 2024, rising from 22nd to 13th place as a result,” the publication said.
Equity’s tier one capital grew by 38.4 percent, resulting in its ranking 15th by size, up from position 19 a year earlier.
Equity ranked as the fastest-growing bank on the continent with a score of 8.31 against a maximum of 10. Growth is measured by changes in assets, loans, deposits and operating income.
KCB ranked second in terms of soundness and leverage metrics. Soundness refers to a bank’s capital level in relation to its loan book, while leverage is the ratio of total deposits to total loans.
KCB's non-performing loans were Sh189.1 billion, accounting for 17.2 percent of its Sh1.09 trillion loan book, as at the end of June 2025.
Equity had Sh71.2 billion in non-performing loans, representing 17.5 percent of its Sh406.8 billion loan book during the same period.
KCB had set aside Sh12.4 billion in loan loss provisions as at June, while Equity incurred Sh7.3 billion in provisions.
Kenya’s banking industry has been struggling with piling bad loans, forcing banks to set aside huge loan loss provisions that are eating into their profitability.
Total non-performing loans stood at Sh672.6 billion as at the end of December 2024 and have since grown to Sh731.8 billion by August this year.
Banks have been taking an aggressive approach to collecting payments from defaulters, resulting in an increased number of court cases and engagements with auctioneers.
