In a monumental shift within the banking industry, KCB Bank has emerged as the largest lender in Kenya, dethroning Equity Bank from its long-standing position. This remarkable feat has been attributed to KCB’s aggressive expansion of its foreign subsidiaries, which has propelled its growth and boosted its total assets. Regulatory filings reveal that KCB’s total assets stood at an impressive Sh1.55 trillion in the year ending December, surpassing Equity’s total assets of Sh1.44 trillion.
Despite KCB’s triumph in terms of asset size, Equity Bank managed to maintain a lead in profitability during the same period. However, it is worth noting that KCB’s profitability figures did not include the full-year profits from its recently acquired subsidiary in the Democratic Republic of Congo (DRC). KCB disclosed that it absorbed a loss of Sh65 million from the DRC business for the month of December alone. Had KCB consolidated the full year, it would have absorbed a profit of Sh3.2 billion from its Congo unit.
Both shareholders and industry observers eagerly await the release of the first-quarter results from these banking giants to gauge their performance in the near term. Equity Bank had previously outperformed its Kenyan rivals, including KCB, in the year ended December 2022, boasting a profit before tax of Sh59.8 billion, which was Sh2.5 billion ahead of KCB’s Sh57.3 billion.
The annual reports from both KCB and Equity provide insight into a fierce competition for control over the banking industry. This intense rivalry has unfolded as both banks embarked on aggressive expansion plans in the broader East African region over the last decade, each vying to establish dominance and secure their positions as the region’s banking powerhouses.
Paul Russo, the Chief Executive Officer of KCB, and James Mwangi, his counterpart at Equity Bank, have consistently emphasized the immense growth opportunities available in the wider East Africa region. They have indicated their intention to continue expanding their operations, capitalizing on the potential for further success.
Notable figures from the regulatory disclosures indicate that KCB’s customer deposits currently stand at Sh1.14 trillion, surpassing Equity’s Sh1.05 trillion. Among the Kenyan-based banks, KCB Group and Equity Group are the only two financial institutions boasting customer deposits exceeding one trillion shillings.
The gap between the banks becomes even more pronounced when considering net customer loans, with KCB leading the pack at Sh863 billion, a significant Sh156 billion more than Equity’s loan book, which stands at Sh706 billion. In terms of shareholder funds, KCB reports Sh200 billion, edging past Equity’s Sh182 billion.
KCB’s dominance extends beyond its financials; the bank also boasts the largest branch network in the region. In 2022, KCB reported a total of 603 branches across the region, nearly doubling Equity’s footprint of 337 branches reported in 2021. Despite this, Equity’s Group CEO has voiced his belief that branchless banking will become the new norm in the near future.
Furthermore, KCB takes pride in being the largest employer in the banking sector, providing job opportunities to over 11,000 employees across the region. This commitment to fostering employment and contributing to economic growth showcases the bank’s significant impact beyond its financial achievements.