Kenyan Banks Climb the NSE Ranks

Equity, KCB & Co-op Dethrone Safaricom

For years, Safaricom stood unchallenged as the crown jewel of the Nairobi Securities Exchange (NSE) ranks. The telecom giant, thanks to its revolutionary M-Pesa platform, often accounted for nearly half of the total market capitalization at the bourse. But a new wave is reshaping Kenya’s stock market: banks are rising to the top.

Equity Group, KCB Group, and Co-operative Bank are now steering the NSE’s value charts. Backed by strong profits, stable dividends, and consistent investor demand, they are steadily overtaking Safaricom’s dominance. This marks a turning point in Kenya’s capital markets, reflecting not only shifting investor preferences but also the resilience of the financial services sector in turbulent times.

Banks Lead a Market Value Revolution

The NSE has recently crossed the KSh 2 trillion mark in combined market capitalization of its top 10 listed firms. Traditionally, Safaricom commanded half of this figure, dwarfing all others. Yet as of mid-2025, banks are claiming a growing share of that pie.

• Equity Group boasts a market cap of about KSh 184 billion, leading the financial sector.
• KCB Group follows closely with KSh 149 billion, surpassing East African Breweries Limited (EABL) in market value.
• Co-operative Bank, Absa Bank Kenya, Standard Chartered, NCBA, Stanbic Holdings, and I&M round up the growing list of heavyweights contributing billions to the NSE’s valuation.

This surge highlights a broader shift from reliance on one telco stock (Safaricom) to a more balanced composition, with financial institutions stepping in as anchors of investor confidence.

Read Also: NSE Outshines African Markets in 2024 with Top Dollar Returns

Why Banks Are Rising Above

Several factors explain why Kenyan banks are climbing past Safaricom and other traditional giants in the NSE ranks:

1. Strong Earnings Performance

Banks have posted solid half-year and full-year results, fueled by growth in loan books, improved asset quality, and digital banking expansion. Equity and KCB in particular have expanded regionally, spreading risk across East Africa.

2. Reliable Dividends

Investors value consistency. Banks have maintained regular dividend payouts, even during periods of macroeconomic uncertainty. This has attracted both institutional and retail investors seeking predictable returns.

3. Defensive Stocks in Tough Times

With inflation and interest rates weighing on businesses and households, investors are turning to banks as defensive stocks. Their regulated status, transparency in reporting, and historical resilience during crises make them safe harbors for capital.

4. Safaricom’s Cooling Momentum

While Safaricom remains Kenya’s most profitable company, its stock has lost some of its momentum. Declining margins in voice services, regulatory pressures, and slower growth in mobile money have allowed banks to narrow the valuation gap.

Key Players Redefining the NSE

• Equity Group Holdings
  Equity is East and Central Africa’s largest financial services provider, with assets of KSh 1.8 trillion as of December 2024. Its aggressive regional expansion into markets such as Uganda, Tanzania, DRC, and Rwanda continues to pay off. Investors also view its digital transformation strategy as a long-term growth engine.
• KCB Group
  With roots dating back to 1896, KCB is leveraging history, scale, and innovation. Its acquisition of National Bank of Kenya has bolstered its asset base, while a focus on digital channels keeps it competitive. Investors value its mix of tradition and forward-looking strategy.
• Co-operative Bank
  Co-op Bank is cementing its place among the top-tier listed firms. Its cooperative movement foundation gives it a unique advantage in building trust and ensuring steady customer inflows, particularly among SMEs and retail clients.
• Other Banking Giants
  Absa Bank Kenya, Standard Chartered, NCBA, and Stanbic Holdings are also seeing increased investor activity. Together, these banks are rewriting NSE’s rankings and diversifying away from single-stock reliance.

Read Also: Why Foreign Investors Are Avoiding the NSE

Implications for Investors and the NSE

1. Market Concentration Risks Remain

Even though banks are stepping up, the NSE remains concentrated around a few mega-cap stocks. This exposes the market to volatility if any one of them experiences turbulence.

2. The Need for Deeper Listings

Kenya’s capital market regulator, the Capital Markets Authority (CMA), continues to push for more IPOs and small-cap participation. Incentives for family-owned and mid-sized businesses to list could further diversify the exchange and reduce over-reliance on a few sectors.

3. Investor Strategy Adjustments

Investors must now balance portfolios carefully. While banks are currently shining, factors like rising interest rates, regulatory caps, or loan default spikes could affect their performance. Diversification across sectors remains critical.

4. Regional Significance

Kenya’s banking success stories are not confined to Nairobi. Equity and KCB, in particular, are positioning themselves as pan-African players, giving them a competitive edge and reinforcing Kenya’s role as a financial hub.

Looking Ahead

The ascent of banks on the NSE ranks marks a new era. Safaricom’s dominance is no longer absolute, and financial institutions are emerging as the symbols of investor confidence. Yet this does not mean banks are immune to risks. Rising non-performing loans, interest rate policies, and regional economic shocks could slow their upward march.

For long-term investors, the message is clear: Kenyan banks are now indispensable to any serious NSE portfolio. At the same time, the future health of the bourse will depend on attracting more listings, deepening liquidity, and balancing market concentration.

Conclusion

The Nairobi Securities Exchange is experiencing a structural realignment. For the first time in years, Safaricom is no longer the undisputed leader. Equity Group, KCB, and Co-operative Bank are rewriting the market’s story, positioning themselves as the new kings of value.

As Kenya’s economy continues to navigate global headwinds, these banks offer resilience, dividends, and investor security. But the real opportunity lies ahead—if regulators and market players can expand the NSE ranks beyond a handful of mega-cap stocks, the Kenyan market could finally unlock its full potential.