Nairobi Securities Exchange listed banks delivered their strongest nine-month performance to date, with combined pre-tax profits rising 10.0% to KSh 269.0 billion and after-tax earnings growing 10.8% to KSh 205.0 billion in the third quarter of 2025.
- •The sector's performance was driven entirely by net interest income, which expanded 12.9% to KSh 425.5 billion, while non-funded income contracted 4.1% to KSh 208.4 billion.
- •The eleven NSE-listed institutions showed a clear divergence between interest income and fee-based revenue.
- •Net interest income accounted for 67.1% of total operating income, up from 63.4% in 2024, indicating a structural shift toward lending as the core revenue driver.
KCB Group generated the highest interest income minus cost of funds at KSh 104.3 billion, followed by Equity Group at KSh 93.6 billion. Other banks showed particularly strong momentum, with Co-operative Bank (+22.8%), NCBA (+27.4%), and I&M Bank (+21.1%) all posting interest income growth exceeding 20%.
In contrast, non-funded income declined across most institutions. Standard Chartered recorded the steepest drop at 28.6%, followed by Stanbic Holdings at 24.5% and KCB Group at 10.1%. Only four banks – Equity, I&M, Absa, and HF Group – managed to grow their non-funded income during the period.
Total operating income reached KSh 633.8 billion, a 6.7% increase from 2024. Equity Group maintained its position as the largest operator by revenue at KSh 156.3 billion, with KCB Group close behind at KSh 149.4 billion. Together, these two institutions accounted for 48.2% of all operating income in the sector.
I&M Bank delivered the fastest operating income growth at 20.2%, followed by Co-operative Bank at 13.9% and NCBA at 13.8%. Standard Chartered saw the steepest decline at 17.0%, while Absa Bank recorded a marginal 0.4% decrease.
Equity Group delivered the highest pre-tax profit at KSh 65.58 billion, representing 28.5% growth from 2024 – the strongest expansion among large banks. KCB Group followed with KSh 62.08 billion in pre-tax earnings, maintaining its position as the second-most profitable institution.
Co-operative Bank reached KSh 30.03 billion in pre-tax profit, its strongest nine-month result in the dataset. I&M Bank posted impressive 25.8% pre-tax growth to KSh 17.75 billion, among the fastest gains in the sector.
Standard Chartered recorded the steepest pre-tax decline at 41.2%, falling to KSh 13.20 billion, while Stanbic Holdings saw pre-tax earnings decrease 8.3% to KSh 12.90 billion.
In after-tax terms, Equity Group remained the most profitable institution with KSh 54.1 billion, representing 32.2% growth from 2024. KCB Group followed with KSh 47.3 billion, while Co-operative Bank reached a record KSh 21.56 billion.
Eight of the eleven banks grew their after-tax profits, with only Standard Chartered (-38.3%) and Stanbic Holdings (-7.5%) recording declines. The sector's after-tax profit growth of 10.8% outpaced both operating income growth (6.7%) and loan growth (6.28%), indicating improved operational efficiency.
The sector's loan book expanded 6.28% to KSh 4.200 trillion, with KCB Group maintaining the largest portfolio at KSh 1.140 trillion. Stanbic Holdings showed the most aggressive expansion at 15.7% growth, while Diamond Trust Bank, I&M Bank, and BK Group all posted growth between 7-12%.
Non-performing loans increased 2.03% to KSh 630.2 billion, but this growth rate was substantially slower than the expansion of the overall loan book, indicating improved asset quality ratios. KCB and Equity Group together held KSh 351.2 billion in NPLs, representing 55.7% of the sector total.
Co-operative Bank recorded the sharpest increase in bad loans at 12.7%, reaching a record KSh 78.9 billion. Conversely, Standard Chartered reduced its NPLs by 24.8% to KSh 9.13 billion, the lowest level since 2015.
The sector's loan loss provisioning fell marginally by 1.4% to KSh 65.4 billion, marking the third-lowest level since 2020. Beneath this stable headline, however, lay a sharp divergence in strategy. KCB Group accounted for over a quarter (27.9%) of all sector provisions at KSh 18.26 billion.
This conservative approach was echoed by several peers, with six banks increasing their charges. Co-operative Bank led the rises with a sharp 31.9% jump to KSh 7.36 billion, followed by NCBA (+24.5% to KSh 5.08B) and I&M Bank (+21.9% to KSh 6.70B).
Five banks reduced their provisions instead. Absa Bank made the deepest cut, slashing its impairment charge by 39.6% to KSh 4.85 billion, while Stanchart and Stanbic also trimmed their provisions by 10.9% and 6.6% respectively.
Customer deposits grew 3.35% to KSh 6.093 trillion, with Equity and KCB collectively controlling 47% of all deposits. Diamond Trust Bank posted the strongest growth among large banks at 15.5%, while I&M Bank expanded 10.2% to a record KSh 455.8 billion.
HF Group showed the fastest overall deposit growth at 21.6%, though from a smaller base. Only three institutions saw deposit contractions: NCBA (-5.3%), KCB (-0.8%), and Standard Chartered (-0.3%).
The Q3 2025 results show a banking sector increasingly dependent on interest income for growth, with non-funded revenue becoming a headwind for most institutions. The improvement in asset quality ratios – with loan growth outpacing NPL growth – suggests better credit risk management across the sector.
The concentration of profits and market share among the largest institutions continues, with Equity and KCB accounting for nearly half of all operating income and deposits. However, mid-tier banks are showing competitive momentum, particularly in loan growth and operational efficiency, while maintaining strong pre-tax profit growth across most institutions.
Note: All figures are sourced from available financial records and may contain marginal errors in human error or calculation.
