The gap between the cheapest and most expensive lenders in Kenya has widened over the past nine months as banks cut deposit rates more aggressively than lending rates.
- •Citibank’s lending rate eased to 9.60% in September 2025, making it the first bank in the market to bring lending pricing down into single digits.
- •Meanwhile, Access Bank and Credit Bank remained above 19%.
- • Over the same period, system-wide deposit rates fell from 10.45% in December 2024 to 7.63% in September 2025, a larger adjustment than the decline in lending rates from 16.90% to 15.07%.
The faster reduction in funding costs supported margin expansion across the sector.
Lending Adjustments Show Clear Market Segmentation
Lending rates declined across most banks, but the pace varied. Citibank recorded the steepest drop, reducing its lending rate by 573 basis points between December and September. ABSA followed with a 505 basis-point reduction, while M-Oriental lowered by 301 basis points. These banks have stronger liquidity profiles and corporate-oriented loan books that can reprice more quickly.
Banks serving SME, unsecured, and micro segments maintained higher pricing. Credit Bank eased lending by only 100 basis points, Co-operative Bank by 100 basis points, and Gulf African by 132 basis points. Development Bank of Kenya made the smallest adjustment in the market, lowering lending by only 15 basis points.
In contrast, Premier Bank, Kingdom Bank, and UBA Kenya increased lending rates, signaling tighter credit stance or higher portfolio risk weighting.
Funding Costs Decline Sharply, Widening Margins
Deposit rates fell more broadly and more sharply than lending rates as liquidity strengthened across the system. Banks with strong current and savings account (CASA) bases cut deposit pricing more aggressively, reducing reliance on expensive term deposits.
Deposit Rates (Sep 2025)
| Top 5 Highest Depositor Rates | Deposit Rate (%) | Top 5 Lowest Depositor Rates | Deposit Rate (%) |
|---|---|---|---|
| Credit Bank | 11.91 | Standard Chartered | 3.23 |
| African Banking Corp (ABC) | 11.35 | Citibank | 5.86 |
| Development Bank of Kenya | 9.50 | Premier Bank | 5.86 |
| Prime Bank | 9.04 | Co-operative Bank | 6.04 |
| SBM Bank | 9.02 | KCB Bank | 6.71 |
The spread between the highest and lowest deposit rates remains wide. ABC, Credit Bank, and Development Bank continue to pay higher rates to attract funds, reflecting retail and SME funding dependencies.
Standard Chartered, Citibank, and Co-operative Bank retain structurally low funding costs due to deep CASA deposits and long-standing customer relationships.
