Nedbank Group, South Africa's fourth-largest bank, secured a Kenyan regulatory waiver in February to acquire roughly 66% of NCBA Group, one of East Africa's biggest lenders. The move signals just how seriously major African financial institutions are taking Kenya as a launchpad into the broader East African market. The country's $147.26 billion GDP, relatively stable currency, and deep financial markets make it one of the continent's most compelling banking destinations. East African economies are also projected to grow at an average of 5.69% this year, according to IMF data.
Nigerian banks got there first, and the deposit numbers show real traction. Over the past five years, deposits at the Kenyan subsidiaries of Guaranty Trust Holding Company, United Bank for Africa, and Access Holdings have more than doubled, reflecting genuine customer growth built through both acquisitions and organic expansion.
The harder question is whether deposits are translating into profits. Despite their growing East African footprint, all three Nigerian lenders have found it consistently difficult to turn their Kenyan operations into reliable profit centers. That tension is drawing more scrutiny at home, where the Central Bank of Nigeria is beginning to push banks to limit shareholder exposure to offshore operations.
With billions of naira still flowing into foreign subsidiaries, the pressure to show returns is building fast.
Originally published by TechCabal.