A Nedbank sign in Sandton, Johannesburg.
Kenya has emerged as one of Africa’s most attractive banking frontiers, drawing increasing interest from foreign lenders seeking growth beyond their home markets.
Most foreign investors betting on Kenya’s banking sector cite several key factors, including the pace of economic growth, regional influence, and regulatory reforms that have positioned the country as a strategic hub for financial services in East Africa.
South Africa’s Nedbank is the latest to be attracted to Kenya, barely two months after it sold its entire stake in West African-headquartered Ecobank Transnational, citing regulatory uncertainty, the deterioration of the Nigerian economy, and the potential increase in capital requirements.
When quitting West Africa, Nedbank said it would set a clear focus on the Southern Africa and East Africa region. Now it has bid to acquire a majority stake in Kenya’s NCBA Group in a transaction valued at 13.9 billion rands (about Sh109.9 billion).
The South African bank intends to use NCBA as its cornerstone investment in East Africa, with ambitions to expand across the region. NCBA chief executive John Gachora said the lender has “from time to time” received approaches from other suitors, pointing to the growing appetite for Kenyan banks.
The looming entry of Nedbank coincides with that of Zenith Bank Plc—the Lagos-headquartered lender that has now received clearance to acquire Kenya’s Paramount Bank.
Zenith is following in the footsteps of other West African lenders such as Access Bank Group, United Bank for Africa, Guarantee Trust Bank, and Ecobank—all of which have set up in Kenya in the recent past to fuel their growth.
The foreign banks setting up in the country have been quick to state that a Kenyan presence offers access to domestic clients and cross-border business in countries such as Uganda, Tanzania, Rwanda, South Sudan, Ethiopia, and the Democratic Republic of Congo.
Such regional access from Nairobi allows banks to centralise operations, manage regional liquidity, and support multinational clients from a single base.
“Kenya’s role as a regional financial hub, supported by strong institutions, sophisticated markets and a dynamic technology sector, makes it a natural anchor for Nedbank’s East African ambitions, including Rwanda, Tanzania and Uganda,” said Nedbank chief executive Jason Quinn, explaining why the lender chose Kenya and East Africa after exiting Nigeria.
East Africa's largest economy
“The region’s stable operating environment, consistent macroeconomic performance, a young, growing, urbanising population, and vibrant business community further reinforce its attractiveness and growth potential.”
From North Africa, Nairobi has attracted Egypt’s Commercial International Bank Egypt, operating in the country as CIB Kenya. Nedbank is joining its South African competitor, Standard Bank Group, which operates in Kenya as Stanbic Holdings, as well as Absa Bank Kenya, which is majority owned by Johannesburg-based Absa Group.
Beyond Africa, Kenya has seen the likes of JPMorgan Chase Bank of the US establish a representative office in the country.
Mr Quinn said Kenya and East Africa, by extension, provide the primary trade corridor that links Africa with the Middle East, India, and Asia—supported by a “robust regulatory environment” and a stable operating environment.
PricewaterhouseCoopers (PwC) said in the recently released Eastern Africa banking survey that the region’s appeal is growing thanks to shifting global dynamics.
“Rising protectionism and realignment of alliances create uncertainty, but they also offer economies in Eastern Africa a chance to redefine their role in regional and global commerce,” said PwC.
Kenya’s appeal to international banks is boosted by its positioning in East Africa as the largest economy in the region and among the top five on the continent by GDP. The country’s role as a regional gateway, with headquarters of key multinationals, non-governmental organisations, and development agencies serving East and Central Africa, further strengthens its case.
The country’s sectors, such as agriculture, manufacturing, trade, infrastructure, telecommunications, and hospitality, have been growing, sustaining demand for corporate banking, project finance, trade finance, and treasury services—areas where foreign banks typically hold competitive advantages.
The UN Department of Economic and Social Affairs’ World Economic Situation and Prospects 2026 report says East Africa continues to outperform other African subregions, even with the slight decline in GDP growth from 5.6 per cent in 2024 to an estimated 5.4 per cent in 2025.
The department says growth in East Africa is forecast to accelerate to 5.8 per cent in 2026, driven by robust growth in Ethiopia and Kenya—the subregion’s two largest economies, projected to grow by 6.3 and 5.1 per cent, respectively.
Regulatory uncertainties
East Africa’s pace of growth is projected at 5.8 per cent this year, contrasting with Southern Africa’s 2 per cent, West Africa’s 4.7 per cent, and the world’s average of 2.7 per cent, according to the UN report. This could partly explain why Nedbank and other lenders are betting on Kenya.
The report links the sluggish performance in Southern Africa to a combination of “structural constraints and external headwinds” in countries such as South Africa and Botswana. Botswana slipped into recession in early 2025 as diamond prices declined.
“South Africa continues to weigh on subregional growth as deep-rooted challenges—including inadequate power supply, high unemployment, and the underperformance of mining and manufacturing—offset the benefits of elevated gold prices,” says the report.
As economies such as those in West Africa grapple with regulatory uncertainties, Kenya’s financial sector has seen reforms in the regulatory space, leading to an improved investment climate for foreign players.
In addition, the Central Bank of Kenya (CBK) has shown openness to foreign participation, including through acquisitions and representative offices, to build stronger banks, contribute to the diversity of Kenya’s financial sector, and catalyse trade and investments.
