Housing finance company limited has been reinstated to a mid peer bank following growth in its market share to 1%, underpinned by capital injection by shareholders through a rights issue that raised KES 5.99 billion. For a long time, Housing Finance belonged to the mid-tier group until in 2020 when it was reduced to a small-tier bank after decline in its core capital due to continuous loss making.
Kenyan banks are classified into three peer groups using a weighted composite index comprising total net assets, total deposits, capital and reserves, number of deposit accounts and number of loan accounts. A large bank has a weighted composite index of 5% and above. A medium bank has a weighted composite index of between 1% and 5% while a small bank has a weighted composite index of less than 1%.
According to the bank supervision annual report 2024 by the Central Bank of Kenya (CBK), the combined market share of large banks was 75.6%, medium banks 16.7% and small banks 7.7%. The upgrade of HFC Ltd saw the combined market share of banks in the medium-tier increase to 16.7% in December 2024, and that of the small-tier banks fall to 7.7%.
“The combined market share of banks in the medium peer group increased to 16.7 percent in December 2024, from 15.0 percent in December 2024. This was due to the entry of HFC Ltd to the medium peer group from the small peer group. Banks in the Small Peer group had a combined market share of 7.7 percent in December 2024, a decrease from 8.4 percent in December 2024. This was due to the exit of HFC Ltd from the small peer group to medium peer group,” read the CBK Bank Supervision Annual Report 2024.
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