Eleven small peer commercial banks are required to raise their core capital to KES 3 billion by the Central Bank of Kenya (CBK) by December 31, 2025. This is as a result of the Apex Bank’s implementation of the new minimum statutory requirement of the core capital after successful amendment of the Banking Act in December 2024.
The Business Laws (Amendment) Act, 2024, required Kenyan banks to progressively increase their minimum core capital to enable them sustain growth and enhance their resilience amid increasing risks. The amendment raised the minimum core capital requirement to commercial banks and mortgage finance institutions from KES 1 billion to KES 10 billion by December 2029, progressively.
Core capital is the minimum capital that banks must maintain to ensure financial stability and safe operations. It is composed of paid-up share capital, retained earnings, and share premium.
The banks include Paramount Bank Ltd, M-Oriental Commercial Bank Ltd, African Banking Corporation Ltd, Premier Bank Limited, Commercial International Bank (CIB) Bank Ltd, Middle East Bank (K) Ltd, Development Bank of Kenya, UBA Kenya Bank Ltd, Credit Bank Ltd, Access Bank Plc, and Consolidated Bank of Kenya.
Banks Core Capital Deficits
According to the banks’ core capital in December 2024, Paramount Bank has a deficit of KES 330 million, while M-Oriental has a deficit of KES 347 million. African Banking Corporation, Premier Bank, and Commercial International Bank have deficits of KES 429 million, 493 million, and 633 million, respectively. Middle East Bank has a deficit of KES 842 million, DBK 859 million, UBA Kenya 1.5 billion, and Credit Bank 1.7 billion. Access Bank and Consolidated Bank of Kenya have deficits of KES 2.8 billion and KES 3.7 billion, respectively.
Huge core capital deficits by the tier III lenders are attributable to high gross non-performing loans and losses.
Notwithstanding the headwinds, some lenders have moved swiftly to beat the December 2025 deadline. UBA Kenya disclosed that it is pursuing an injection from its controlling group, UBA Plc. DIB, though above the KES 3 billion December 2025 statutory requirement, is eyeing KES 6.7 billion from its parent firm in the United Arab Emirates (UAE). Similarly, Premier Bank, Access Bank, and CIB International Bank are targeting injections from their controlling firms. Failure to meet the 3 billion core capital statutory requirement by December 31, 2025, the banks will lose their licenses.
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