Kenyan banks more resilient than Nigerian counterparts


“The reason why the Kenyan banks stock price share performances have been better compared to Nigeria is because of the environment they are operating in. If you look at Nigeria, there are a couple of headwinds coming into the sector,” Addington Jerahuni, a Sanlam Investment Management senior equity analyst told CNBC Africa.

“There are markets that will always focus on short-term dynamics than the long term story. If you look across into Kenya there has been a very stable environment, they have gone over the elections, interest rates are coming off so generally one would expect normal market behavior.”

According to the Ernst & Young’s 2014 Global Consumer Banking survey, Kenya is ranked second in Africa after Nigeria. This demonstrates the growing level of confidence consumers have in the country’s banking industry, and raises interest for possible investors.


Jerahuni said that the leading players in the East African Community’s banking sector – Equity Bank, Kenya Commercial Bank (KCB) and Cooperative Bank – could be looking at expanding in the region due to the fact that Kenya currently enjoys stock domination.

(WATCH VIDEO: Mobile banking enhancing KCB services)

Currently KCB has 80 per cent of its stock in Kenya and 10 per cent in South Sudan and would most likely expand its portfolio in countries like Burundi, Uganda and Tanzania.

With the increasing use of technology in Kenya’s financial services sector, mobile banking can be seen as one of the platforms required to attract more clients.

However, they will have to be more appealing than Safaricom, which is one of the big players in mobile money services.

“It has to be more compelling for a customer to move away from a product like M-PESA [and] to decide to use a fully owned banking product from Equity or KCB. Currently KCB is coming with M-Benki and it looks like things are looking up,” Jerahuni said.  

Previous banking products like Equity Bank’s M-KESHO have not received positive feedback due to the dominance of Safaricom.