Updated on June 2, 2024: This article has undergone a comprehensive update to present readers with the latest information regarding Tier 1 banks in Kenya. Significant enhancements include the transition of Barclays Banks to Absa Bank Kenya, CBA to NCBA, and the addition of I&M Holdings. Additionally, a new conclusion and comprehensive FAQs have been incorporated to enrich the reader’s understanding of the topic.
In this article, I take you through the list of tier 1 banks in Kenya. Banks! We have put so much faith in these institutions that we almost give them our every penny to save it for us. Banks are beneficial institutions when regulated appropriately, and if not, they can be the most significant pain.
I will take you back when Chase bank’s scandal was uncovered. If you needed to withdraw money urgently, then you would have faced the disappointment of the year.
This is why the central bank of Kenya has come up with a list of Tier 1, Tier 2 and Tier 3 banks. Tier 1 banks in Kenya is what you would wish to call ‘too big to fall’ banks in Kenya.
Currently, there are 42 banks in Kenya which fall under the three categories mentioned above.
While classifying the banks, the central bank of Kenya evaluates their index of net assets, capital, and reserves, customer deposits, number of loans and deposit accounts.
What are Tier 1 Banks in Kenya?
Tier 1 banks in Kenya are considered to be safe by CBK and control almost 50% of the Kenyan banking sector market share.
According to the Central Bank of Kenya, Tier 1 banks have a weighted index of five per cent and above, Tier banks have an index of between one and five per cent while Tier three banks have a weighted index of below 0 per cent.
In the past few years, a lot has been happening in the banking sector.
Perhaps the most notable one is the interest cap which saw interest rates on loans regulated to a manageable level.
The new no-nonsense Central Bank Governor forced Kenyans to think hard on where they decide to stash their money.
The question of banking is a rather serious one and therefore choosing where to bank your money should be an informed decision.
So far, three banks, namely, Chase Bank, Imperial Bank, and Dubai bank, are among the few banks that CBK has pointed out as having financial malpractices.
What seems like a vibrant bank could be a disaster in the waiting. The Chase bank case will forever be a reference point where directors were loaning themselves over 1 billion shillings putting the finances of the public at risk.
List of Tier 1 Banks in Kenya
So with these latest developments, what is the best place to bank your money?
Tier 1 is made up of the big old banks. These will almost certainly never go under similarly as Chase or Imperial.
Tier 1 banks are relatively the safest. Here in Kenya, six banks make up the top tier and collectively control 49.9% of the market. Sixteen other banks make up Tier 2, and together control 41.7% of the market. The last tier, Tier 3, is made up of 21 small banks that control 8.4% of the market.
Here is a list of tier 1 banks in Kenya:
- Kenya Commercial Bank
- Equity bank
- Cooperative Bank
- Barclays Bank
- Commercial Bank of Africa (CBA)
- Standard Chartered Bank
- Stanbic Bank
- Diamond Trust Bank (DTB)
1. 1. Absa Bank Kenya
About a century ago, Absa Bank – formerly Barclays Bank – started doing business in Kenya. Ever since, the bank has worked tirelessly to improve the services it offers the people of Kenya. With strong financial resources coming from both domestic and foreign sources, Absa Bank is well-established.
With more than 200 ATMs located all throughout the country, the bank guarantees easy access to financial services. Offerings like online and mobile banking are noteworthy and have a big part in Absa Bank’s Tier 1 ranking. The Absa Westend Building, off Waiyaki Way, houses the bank’s headquarters, which has an asset base exceeding Ksh. 374.109 billion.
2. Kenya Commercial Bank
With its founding in 1896, Kenya Commercial Bank, or KCB for short, is one of the country’s biggest and oldest financial organizations. The bank’s cutting-edge products, such as KCB Mpesa, have helped it to secure a spot among the best Tier 1 banks.
Well-known for its effectiveness, KCB Mpesa offers customers access to loans and savings plans in addition to facilitating mobile banking. Acknowledged for its agency banking and mobile banking offerings, KCB has cemented its standing as one of Kenya’s leading financial houses. The famous KCB Building in Nairobi is home to the bank’s headquarters.
3. Equity Bank
Equity Group Holdings Limited underwent a restructuring in 2014, incorporating Equity Bank. Thanks to technologies like Equitel and the Eazzy Banking App, Equity Bank has become the leading Tier 1 bank. Equity is currently the second-biggest supplier of mobile transfer services. The bank’s main office is situated along Hospital Road in Upper Hill near Equity Center.
4. Cooperative Bank
The Cooperative Bank of Kenya was founded in 1991 and holds a commercial bank license from the Central Bank of Kenya, which is Kenya’s primary banking regulator. It is one of the most well-known financial institutions in Kenya, serving more than two million customers in all 47 counties. The Cooperative Bank is a pillar of the country’s banking industry thanks to its vast network of 270 branches.
The bank provides a variety of services, including loans, mortgages, and insurance, that are suited for both individual and business customers. To accommodate a range of financial demands, it also offers credit cards, payroll management programs, and online banking services.
5. NCBA
Through its parent business, NIC, NCBA Bank, a part of NCBA Group Plc, can trace its history back to 1959. The bank is one of the biggest banks in Kenya with Ksh 487.8 billion in assets. The establishment of NCBA Bank as a top-tier 1 institution in Kenya was made possible in large part by the merger of NIC Bank and Commercial Bank of Africa.
6. Standard Chartered Bank
Kenya’s leading bank, Standard Chartered Bank, has branches all over the country, including in key towns like Nairobi, Mombasa, and Kisumu. The bank provides a full range of banking services and products, such as credit cards, current accounts, individual and business loans, savings accounts, and current accounts.
Additionally, it provides investment management services to institutional clients via Standard Chartered Investment Management (SCIM) Limited, which is made possible via an East African network of brokerages. In an ongoing effort to improve customer service, the bank has launched an online platform that allows for smooth transactions to be completed without the need to visit a branch.
7. Stanbic Bank
The 2008 merger of CFC Bank Limited and Stanbic Bank Kenya Limited resulted in the establishment of Stanbic Bank, a well-known financial institution with more than 20 branches throughout Kenya. Stanbic Bank meets the needs of its clients by providing a wide range of banking products and services, including credit cards, current accounts, and savings accounts.
8. Diamond Trust Bank (DTB)
Diamond Trust Bank (DTB) was established in 1945 and has branches in Tanzania, Burundi, Kenya, and Uganda. DTB’s strong financial support from partners including Habib Bank and the Aga Khan Fund for Economic Development helped it to rank among Kenya’s Tier 1 banks.
9. I&M Holdings
Investments & Mortgages Limited is the parent company of I&M Holdings, which started its banking operations in 1980. It is one of the biggest commercial banks in Kenya with assets of Ksh. 415.2 billion and shareholders’ equity of Ksh. 69.6 billion. After I&M Holdings bought Giro Bank, the bank underwent a transition into a Tier 1 institution. The bank’s regional growth throughout East Africa was also a major factor in its rise to Tier 1 status.
FAQs – List of Tier 1 Banks in Kenya
How Are Tier 1 Banks Distinguished From Other Banks?
Tier 1 banks are distinguished by their strong capital bases, extensive branch networks, wide range of services, and significant market influence.
What Factors Contribute To A Bank Being Classified As Tier 1?
Factors contributing to Tier 1 status include capital adequacy, asset quality, profitability, market share, and regulatory compliance.
What Role Do Tier 1 Banks Play In Kenya’s Economy?
Tier 1 banks play a crucial role in providing financial services to individuals, businesses, and government entities, fostering economic growth, facilitating investment, and driving innovation.
How Do Tier 1 Banks Contribute To Financial Inclusion In Kenya?
Tier 1 banks often spearhead initiatives to expand access to banking services in underserved areas, promote digital financial solutions, and support microfinance programs.
What Are Some Key Services Offered By Tier 1 Banks In Kenya?
Tier 1 banks offer a wide range of services, including savings and current accounts, loans and mortgages, credit cards, investment management, and international banking services.
What Regulatory Oversight Do Tier 1 Banks In Kenya face?
Tier 1 banks are subject to stringent regulation and supervision by the Central Bank of Kenya (CBK) to ensure stability, integrity, and compliance with banking laws and regulations.
What Are The Growth Prospects For Tier 1 Banks In Kenya?
Tier 1 banks are well-positioned to capitalize on Kenya’s growing economy, expanding middle class, and increasing demand for financial services. Continued innovation and strategic expansion are expected to drive their growth trajectory in the years to come.
Conclusion
Tier 1 banks in Kenya represent the highest level of the banking industry in the nation; they are distinguished by their broad reach, strong financial standing, and full range of services provided. These eminent organizations support stability in the community’s economy and are essential to advancing financial inclusion and economic expansion.
They have millions of clients and hundreds of billions in assets. Think about this, when you go to an M-Pesa agent, they are probably agents of Equity Bank, Co-op Bank, KCB, or Family Bank. Why? Because a considerable population has a bank account with one or multiple banks mentioned above.
